Program Information mutandis in Article 27-33 of the FIEA and of Article 22 of the FIEA applied...

Program Information

SpareBank 1 SR-Bank ASA

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PROGRAM INFORMATION

Type of Information: Program Information

Date of Announcement: 20 July 2017

Issuer(s) Name: SpareBank 1 SR-Bank ASA (the "Issuer")

Name and Title of Representative: Inge Reinertsen Chief Financial Officer

Address of Head Office: Bjergsted Terrasse 1 N-4001 Stavanger, Norway

Telephone: +47 51509450

Contact Person: Attorney-in-Fact: Hiroto Ando, Attorney-at-law Aina Ono, Attorney-at-law

Anderson Mori & Tomotsune Address: Akasaka K-Tower 2-7, Motoakasaka 1-chome Minato-ku, Tokyo

Telephone: +81-3-6888-1000

Type of Securities: Notes

Scheduled Issuance Period: 21 July 2017 to 20 July 2018

Maximum Outstanding Issuance Amount: €10,000,000,000

Address of Website for Announcement: http://www.jpx.co.jp/english/equities/products/tpbm/announcement/index.html

Status of Submission of Annual Securities Reports or Issuer Filing Information:

None

Name of Lead Manager (for the purpose of this Program Information):

Daiwa Capital Markets Europe Limited SMBC Nikko Capital Markets Limited

Notes to Investors:

1. The TOKYO PRO-BOND Market is a market for professional investors, etc. (Tokutei Toushika tou) as defined in Article 2, Paragraph 3, Item 2(b)(2) of the Financial Instruments and Exchange Act of Japan (Act No. 25 of 1948, as amended, the "FIEA") (the "Professional Investors, Etc."). Notes listed on the market ("Listed Notes") may involve high investment risk. Investors should be aware of the listing eligibility and timely disclosure requirements that apply to issuers of Listed Notes on the TOKYO PRO-BOND Market and associated risks such as the fluctuation of market prices and shall bear responsibility for their investments. Prospective investors should make investment decisions after having carefully considered the contents of this Program Information.

2. Where this Program Information (a) contains any false statement on important matters, or (b) lacks information on: (i) important matters that should be announced or (ii) a material fact that is necessary to avoid misleading content, a person who, at the time of announcement of this Program Information, is an officer (meaning an officer stipulated in Article 21, Paragraph 1 of the FIEA (meaning a director (torishimari-yaku), accounting advisor (kaikei-sanyo), corporate auditor (kansa-yaku) or executive officer (shikkou-yaku), or a person equivalent to any of these) (each an "Officer") of the Issuer) that announced this Program Information shall be liable to compensate persons who acquired the Notes for any damage or loss arising from the false statement or lack of information in accordance with the provisions of Article 21, Paragraph 1, Item 1 of the FIEA applied

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mutatis mutandis in Article 27-33 of the FIEA and of Article 22 of the FIEA applied mutatis mutandis in Article 27-34 of the FIEA. However, this shall not apply to cases where the person who acquired the Notes was aware of the existence of the false statement or the lack of information at the time of subscription for acquisition of the Notes. Additionally, such Officer shall not be required to assume the liability prescribed above, where he/she proves that he/she was not aware of, and was unable to obtain knowledge of, even with due care, the existence of the false statement or the lack of information.

3. The regulatory framework for the TOKYO PRO-BOND Market is different in fundamental aspects from the general regulatory framework applicable to other exchange markets in Japan. Investors should be aware of the rules and regulations of the TOKYO PRO-BOND Market, which are available on Japan Exchange Group, Inc. website.

4. Tokyo Stock Exchange, Inc. ("Tokyo Stock Exchange") does not express opinions or issue guarantees, etc. regarding the content of this Program Information (including but not limited to, whether this Program Information (a) contains a false statement or (b) lacks information on: (i) important matters that should be announced or (ii) a material fact that is necessary to avoid misleading content) and shall not be liable for any damage or loss.

5. This Program Information is prepared pursuant to Rule 206, Paragraph 2 of the Special Regulations of Securities Listing Regulations Concerning Specified Listed Securities of Tokyo Stock Exchange (hereinafter referred to as the "Special Regulations") as information prescribed in Article 2, Paragraph 1, Item 1 of the Cabinet Office Ordinance on Provision and Publication of Information on Securities, etc. Accordingly, this Program Information shall constitute Specified Securities Information stipulated in Article 27-31, Paragraph 1 of the FIEA.

6. In this Program Information, all references to "U.S. $" or to "U.S. dollars" are to United States dollars, references to "Yen", "JPY", and "¥" are to Japanese Yen, references to "Sterling" are to pounds sterling, references to "Renminbi" and "CNY" are to Chinese Yuan Renminbi, the lawful currency of The People's Republic of China ("PRC"), and references to "EUR", "euro" and "€" are to the single currency of participating Member States of the European Union.

7. All prospective investors who purchase the Notes shall be required to agree not to sell, transfer or otherwise dispose of the Notes to be held by them to any person other than the Professional Investors, Etc., except for the transfer of the Notes to the following:

(a) the Issuer or an officer (meaning an officer as prescribed in Article 11-2, Paragraph 1, Item 2 (c) of the Cabinet Office Ordinance on Definitions under Article 2 of the FIEA (MOF Ordinance No. 14 of 1993, as amended, the "Definitions Cabinet Office Ordinance") (meaning a director (torishimari-yaku), corporate auditor (kansa-yaku), executive officer (shikkou-yaku), board member (riji) or auditor (kanji), or a person equivalent to any of these) of the Issuer) who holds shares or equity pertaining to voting rights exceeding 50% of all the voting rights in the Issuer which is calculated by excluding treasury shares or any non-voting rights shares (the "Voting Rights Held by All the Shareholders, Etc." (Sou Kabunushi Tou no Giketsuken)) (as prescribed in Article 29-4, Paragraph 2 of the FIEA) of the Issuer under his/her own name or another person's name (each a "Specified Officer" (Tokutei Yakuin)), or a juridical person (excluding the Issuer) whose shares or equity pertaining to voting rights exceeding 50% of the Voting Rights Held by All the Shareholders, Etc., are held by the Specified Officer (the "Controlled Juridical Person, Etc." (Hi-Shihai Houjin Tou)) (as prescribed in Article 11-2, Paragraph 3 of the Definitions Cabinet Office Ordinance) including a juridical person (excluding the Issuer) whose shares or equity pertaining to voting rights exceeding 50% of the Voting Rights Held by All the Shareholders, Etc. are jointly held by the Specified Officer and the Controlled Juridical Person(s), Etc. under their own name or another person's name (as prescribed in Article 11-2, Paragraph 2 of the Definitions Cabinet Office Ordinance); or

(b) a company that holds shares or equity pertaining to voting rights exceeding 50% of the Voting Rights Held by All the Shareholders, Etc. of the Issuer in its own name or another person's name.

8. When (i) a solicitation of an offer to acquire the Notes or (ii) an offer to sell or a solicitation of an offer to purchase the Notes (collectively, "Solicitation of the Note Trade") is made, the following matters shall be notified from the person who makes such Solicitation of the Note Trade to the person to whom such Solicitation of the Note Trade is made:

(a) no securities registration statement (pursuant to Article 4, Paragraphs 1 through 3 of the FIEA) has been

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filed with respect to the Solicitation of the Note Trade;

(b) the Notes fall, or will fall, under the Securities for Professional Investors (Tokutei Toushika Muke Yukashoken) (as defined in Article 4, Paragraph 3 of the FIEA);

(c) any acquisition or purchase of the Notes by such person pursuant to any Solicitation of the Note Trade is conditional upon such person (i) agreeing to comply with the restriction on transfer of the Notes as set forth in note 7 above, (in the case of a solicitation of an offer to acquire the Notes to be newly issued), or (ii) entering into an agreement providing for the restriction on transfer of the Notes as set forth in note 7 above with the person making such Solicitation of the Note Trade (in the case of an offer to sell or a solicitation of an offer to purchase the Notes already issued);

(d) Article 4, Paragraphs 3, 5 and 6 of the FIEA will be applicable to such certain solicitation, offers and other activities with respect to the Notes as provided in Article 4, Paragraph 2 of the FIEA;

(e) the Specified Securities Information, Etc. (Tokutei Shouken Tou Jouhou) (as defined in Article 27-33 of the FIEA) with respect to the Notes and the Issuer Information, Etc. (Hakkosha Tou Jouhou) (as defined in Article 27-34 of the FIEA) with respect to the Issuer have been or will be made available for the Professional Investors, Etc. by way of such information being posted on the web-site maintained by the TOKYO PRO-BOND Market (http://www.jpx.co.jp/english/equities/products/tpbm/announcement/index.html or any successor website), in accordance with Rules 210 and 217 of the Special Regulations; and

(f) the Issuer Information, Etc. will be provided to the holders of the Notes or made public pursuant to Article 27-32 of the FIEA.

9. Unsubordinated Notes issued under this SpareBank 1 SR-Bank ASA €10,000,000,000 Euro Medium Term Note Programme (the "Programme") under the Base Prospectus dated 7 July 2017 included in this Program Information (the "Base Prospectus") are expected to be rated A1 by Moody's Investors Service Limited ("Moody's") and A- by Fitch Ratings Limited ("Fitch"). Subordinated Notes issued under the Programme are expected to be rated Baa2 by Moody's and (if rated) shall be rated by Fitch upon issuance. Those credit rating firms have not been registered under Article 66-27 of the FIEA ("Unregistered credit rating firms").

Unregistered credit rating firms are not subject to any supervision of the Financial Services Agency of Japan or regulations applicable to credit rating firms, including obligations to disclose information, nor any obligation to publicize information regarding such matters as listed in Article 313, Paragraph 3, Item 3 of the Ordinance of the Cabinet Office Concerning Financial Instruments Business, Etc. (the "Cabinet Office Ordinance").

Fitch has Fitch Ratings Japan Limited (registration number: Commissioner of Financial Services Agency (kakuzuke) No. 7) and Moody's has Moody's Japan K.K. (registration number: Commissioner of Financial Services Agency (kakuzuke) No. 2) within their respective groups as credit rating firms registered under Article 66-27 of the FIEA ("Registered credit rating firms"), and Fitch and Moody's are specified affiliated corporations (as defined in Article 116-3, Paragraph 2 of the Cabinet Office Ordinance) of the respective Registered credit rating firms above. The assumptions, significance and limitations of the credit ratings given by Fitch and Moody's are made available for the public on their respective websites of (i) Fitch Ratings Japan Limited, at "Assumptions, Significance and Limitations of Credit Ratings" posted under "Regulatory Affairs" on its website (https://www.fitchratings.com/site/japan/regulatory) and (ii) Moody's Japan K.K., at "Assumptions, Significance and Limitations of Credit Ratings" posted under "Related to Explanation of Unregistered Credit Ratings" in the column titled "Use of Ratings of Unregistered Firm" on its website in the Japanese language (https://www.moodys.com/pages/default_ja.aspx).

10. The selling restrictions set forth in notes 7 and 8 above shall prevail over those set forth in the section entitled "SUBSCRIPTION AND SALE" in the Base Prospectus.

11. Although the Programme contemplates issuance of various types of the Notes as set out in "GENERAL DESCRIPTION OF THE PROGRAMME" in the Base Prospectus, the Notes which are classified as Exempt Notes (as defined in the Base Prospectus) shall not be listed on the TOKYO PRO-BOND Market.

12. Copies of the documents incorporated by reference in the Base Prospectus dated 7 July 2017 and the supplements thereto are available for viewing at: https://www.sparebank1.no/en/sr-bank/about-us/investor/financial-info.html

http://www.jpx.co.jp/english/equities/products/tpbm/announcement/index.html

SPAREBANK 1 SR-BANK ASA (incorporated with limited liability in Norway)

€10,000,000,000

Euro Medium Term Note Programme Under the Euro Medium Term Note Programme described in this base prospectus (the “Programme” and the “Base Prospectus”), SpareBank 1 SR-Bank ASA (the “Issuer”), subject to compliance with all relevant laws, regulations and directives, may from time to time issue Euro Medium Term Notes (the “Notes”) denominated in any currency agreed between the Issuer and the relevant Dealer (as defined below). As more fully described herein, Notes may be (i) issued on an unsubordinated basis (“Unsubordinated Notes”) or (ii) issued on a subordinated basis as provided in “Terms and Conditions of the Ordinary Notes” herein (“Subordinated Notes”). The Terms and Conditions of Subordinated Notes will not contain any events of default. Notes may be issued in bearer form (“Bearer Notes”), registered form (“Registered Notes”) (the Bearer Notes together with the Registered Notes, the “Ordinary Notes”) or uncertificated book entry form (“VPS Notes”) cleared through the Norwegian Central Securities Depositary, Verdipapirsentralen ASA (the “VPS”). The maximum aggregate nominal amount of all Ordinary Notes and VPS Notes from time to time outstanding under the Programme will not exceed €10,000,000,000 (or its equivalent in other currencies calculated as described in the Programme Agreement described herein), subject to increase as described herein. The Notes may be issued on a continuing basis to one or more of the Dealers specified under “General Description of the Programme” and any additional Dealers appointed under the Programme from time to time by the Issuer (each a “Dealer” and together the “Dealers”), which appointment may be for a specific issue or on an ongoing basis. References in this Base Prospectus to the “relevant Dealer” shall, in the case of an issue of Notes being (or intended to be) subscribed by more than one Dealer, be to all Dealers agreeing to purchase such Notes. An investment in Notes issued under the Programme involves certain risks. For a discussion of these risks see “Risk Factors”. Application has been made to the Commission de Surveillance du Secteur Financier (the “CSSF”) in its capacity as competent authority under the Luxembourg Act dated 10 July 2005, as amended, on prospectuses for securities (the “Luxembourg Prospectus Law”) to approve this document as a base prospectus relating to the Notes. The CSSF assumes no responsibility for the economic and financial soundness of the transactions contemplated by this Base Prospectus or the quality or solvency of the Issuer in accordance with Article 7(7) of the Luxembourg Prospectus Law. Application has also been made to the Luxembourg Stock Exchange for Notes issued under the Programme to be listed on the official list of the Luxembourg Stock Exchange and to be admitted to trading on the Luxembourg Stock Exchange’s regulated market. The Luxembourg Stock Exchange’s regulated market (the “Regulated Market”) is a regulated market for the purposes of the Markets in Financial Instruments Directive (Directive 2004/39/EC). The Issuer intends to request that the CSSF provide the competent authority in Norway (the Financial Supervisory Authority of Norway (“FSAN”) (Finanstilsynet)) with a certificate of approval attesting that this Base Prospectus has been drawn up in accordance with the Luxembourg Prospectus Law (the “Notification”). The Issuer may request the CSSF to provide competent authorities in additional Member States within the European Economic Area (the “EEA”) with a Notification. Following provision of the Notification, the Issuer may apply for Notes issued under the Programme to be listed and admitted to trading on one of the Oslo Stock Exchange’s regulated markets (or on the regulated market of any other Member State to which a Notification has been made), either together with a listing on the Regulated Market of the Luxembourg Stock Exchange or as a single listing. If any Notes issued under the Programme are to be listed on the Oslo Stock Exchange (or on the regulated market of any other Member State to which a Notification has been made), this will be specified in the applicable Final Terms. Any VPS Notes which are to be listed are expected to be listed on the Oslo Stock Exchange. The requirement to publish a prospectus under the Prospectus Directive (as defined under “Important Notice” below) only applies to Notes which are to be admitted to trading on a regulated market in the EEA and/or offered to the public in the EEA other than in circumstances where an exemption is available under Article 3.2 of the Prospectus Directive (as implemented in the relevant Member State(s)). References in this Base Prospectus to Exempt Notes are to Notes for which no prospectus is required to be published under the Prospectus Directive. The CSSF has neither approved nor reviewed information contained in this Base Prospectus in connection with Exempt Notes. Notice of the aggregate nominal amount of Notes, interest (if any) payable in respect of Notes, the issue price of Notes and any other terms and conditions not contained herein which are applicable to each Tranche (as defined under “Terms and Conditions of the Ordinary Notes” (the “Ordinary Note Conditions”) and “Terms and Conditions of the VPS Notes” (the “VPS Conditions” which, when taken together with the Ordinary Note Conditions, are referred to as the “Conditions”)) of Notes will be set out in a final terms document (the “Final Terms”) which, with respect to Notes to be listed on the Luxembourg Stock Exchange will be filed with the CSSF and with respect to Notes to be listed on any other stock exchange or market will be delivered to such other stock exchange or market, on or before the date of issue of the Notes of such Tranche. Copies of Final Terms in relation to Notes to be listed on the Luxembourg Stock Exchange will also be published on the website of the Luxembourg Stock Exchange (www.bourse.lu). In the case of Exempt Notes, notice of the aggregate nominal amount of Notes, interest (if any) payable in respect of Notes, the issue price of Notes and certain other information which is applicable to each Tranche will be set out in a pricing supplement document (the “Pricing Supplement”). Accordingly, in the case of Exempt Notes, each reference in this Base Prospectus to the applicable Final Terms should be read and construed as a reference to the applicable Pricing Supplement unless the context requires otherwise. The Notes have not been and will not be registered under the United States Securities Act of 1933, as amended (the “Securities Act”) or any state securities laws and the Notes in bearer form are subject to U.S. tax law requirements. Subject to certain exceptions, the Notes may not be offered, sold or delivered within the United States. The Notes are being offered and sold outside the United States to non-U.S. persons in reliance on Regulation S under the Securities Act (“Regulation S”) in compliance with applicable securities laws. Each purchaser of a Note will be deemed, by its acceptance or purchase thereof, to have made certain acknowledgements, representations and agreements intended to restrict the resale or other transfer of such Note, as described in this Base Prospectus, and, in connection therewith, may be required to provide confirmation of its compliance with such resale or other transfer restrictions in certain cases (see “Subscription and Sale and Transfer and Selling Restrictions”). Unsubordinated Notes issued under the Programme are expected to be rated A1 by Moody’s Investors Service Limited (“Moody’s”) and A- by Fitch Ratings Limited (“Fitch”). Subordinated Notes issued under the Programme are expected to be rated Baa2 by Moody’s and (if rated) shall be rated by Fitch upon issuance, such rating to be disclosed in the Final Terms or Pricing Supplement, as applicable. Each of Moody’s and Fitch is established in the European Union and registered under Regulation (EC) No. 1060/2009 (as amended) (the “CRA Regulation”). As such each of Moody’s and Fitch is included in the list of credit rating agencies published by the European Securities and Markets Authority on its website (at http://www.esma.europa.eu/page/List- registered-and-certified-CRAs) in accordance with the CRA Regulation. Where a Tranche of Notes is rated, such rating will be disclosed in the Final Terms or Pricing Supplement, as applicable, and will not necessarily be the same as the rating assigned to Notes already issued by Moody’s and Fitch. A security rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, reduction or withdrawal at any time by the assigning rating agency.

The date of this Base Prospectus is 7 July 2017.

SRBANK

Ordinary Note Arranger VPS Note Arranger J.P. Morgan SpareBank 1 SR-Bank ASA

Dealers (in respect of the Ordinary Notes only)

Citigroup Commerzbank Credit Suisse Goldman Sachs International HSBC J.P. Morgan Landesbank Baden-Württemberg Nomura

Société Générale

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IMPORTANT NOTICE

This document comprises a base prospectus (the “Base Prospectus”) for the purposes of Article 5.4 of the Prospectus Directive 2003/71/EC (as amended by Directive 2010/73/EU (the “2010 PD Amending Directive”), the “Prospectus Directive”) and for the purpose of giving information with regard to the Issuer, the Issuer and its subsidiaries taken as a whole (the “SR-Bank Group”) and the Notes which, according to the particular nature of the Issuer and the Notes, is necessary to enable investors to make an informed assessment of the assets and liabilities, financial position, profit and losses and prospects of the Issuer and of the rights attaching to the Notes. This Base Prospectus is not a prospectus for the purposes of Section 12(a)(2) or any other provision or order under the Securities Act.

The Ordinary Note Arranger and the Dealers have not been involved in the structuring of the VPS Notes, will not participate in any issuances of the VPS Notes and therefore accept no responsibility or liability in connection with the VPS Notes (in particular, for any subscriptions to the VPS Notes under the Programme and/or any issuance or underwriting thereof).

The Issuer accepts responsibility for the information contained in this Base Prospectus and the Final Terms for each Tranche of Notes issued under the Programme. To the best of the knowledge of the Issuer (having taken all reasonable care to ensure that such is the case) the information contained in this Base Prospectus is in accordance with the facts and does not omit anything likely to affect the import of such information.

An investment in the Notes involves a reliance on the creditworthiness of the Issuer only and not that of any other entities. The Notes will not be obligations of, and will not be guaranteed by any member of the SR-Bank Group, other than the Issuer itself, the Ordinary Note Arranger, the VPS Note Arranger, the Dealers, any company in the same group of companies as such entities or any other party to the transaction documents relating to the Programme. No liability whatsoever in respect of any failure by the Issuer to pay any amount due under the Notes will be accepted by any of the Ordinary Note Arranger, the VPS Note Arranger, the Dealers, any company in the same group of companies as such entities or any other party to the transaction documents relating to the Programme.

Copies of the Final Terms will be available from the registered office of the Issuer and the specified office set out below of the Paying Agents (as defined below) and (in the case of Ordinary Notes listed on the official list of the Luxembourg Stock Exchange and admitted to trading on the regulated market of the Luxembourg Stock Exchange) will be published on the website of the Luxembourg Stock Exchange (www.bourse.lu).

This Base Prospectus is to be read in conjunction with the applicable Final Terms and all documents which are deemed to be incorporated in it by reference (see “Documents Incorporated by Reference and Supplements to the Base Prospectus”). This Base Prospectus shall be read and construed on the basis that such documents form part of this Base Prospectus.

The Ordinary Note Arranger, the VPS Note Arranger and the Dealers make no representation or warranty as to the accuracy or completeness of any such information. Accordingly, no representation, warranty or undertaking, express or implied, is made and no responsibility or liability is accepted by the Dealers, the Ordinary Note Arranger or the VPS Note Arranger as to the accuracy or completeness of the information contained in this Base Prospectus or any other information provided by the Issuer in connection with the Programme. Neither the Dealers, the Ordinary Note Arranger nor the VPS Note Arranger accepts any liability in relation to the information contained in this Base Prospectus or any other information provided by the Issuer in connection with the Programme.

No person is or has been authorised by the Issuer to give any information or to make any representation not contained in or not consistent with this Base Prospectus or any other information supplied in connection with

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the Programme or the Notes and, if given or made, such information or representation must not be relied upon as having been authorised by the Issuer, the Ordinary Note Arranger, the VPS Note Arranger or any of the Dealers.

Neither this Base Prospectus nor any other information supplied in connection with the Programme or any Notes (i) is intended to provide the basis of any credit or other evaluation or (ii) should be considered as a recommendation by the Issuer, the Ordinary Note Arranger, the VPS Note Arranger or any of the Dealers that any recipient of this Base Prospectus or any other information supplied in connection with the Programme or any Notes should purchase any Notes. Each investor contemplating purchasing any Notes should make its own independent investigation of the financial condition and affairs, and its own appraisal of the creditworthiness, of the Issuer. Neither this Base Prospectus nor any other information supplied in connection with the Programme or the issue of any Notes constitutes an offer or invitation by or on behalf of the Issuer, the Ordinary Note Arranger, the VPS Note Arranger or any of the Dealers to any person to subscribe for or to purchase any Notes.

Neither the delivery of this Base Prospectus nor the offering, sale or delivery of any Notes shall in any circumstances imply that the information contained herein concerning the Issuer is correct at any time subsequent to the date hereof or that any other information supplied in connection with the Programme is correct as of any time subsequent to the date indicated in the document containing the same. The Ordinary Note Arranger, the VPS Note Arranger and the Dealers expressly do not undertake to review the financial condition or affairs of the Issuer during the life of the Programme or to advise any investor in the Notes of any information coming to their attention.

The Notes have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States, and the Notes may include Bearer Notes that are subject to U.S. tax law requirements. Subject to certain exceptions, the Notes may not be offered, sold or, in the case of Bearer Notes, delivered within the United States or to, or for the account or benefit of, U.S. persons (as defined in the U.S. Internal Revenue Code of 1986, as amended, and regulations thereunder). The Notes are being offered and sold in reliance on Regulation S. For a description of these and certain further restrictions on offers, sales and transfers of Notes and distribution of this Base Prospectus, see “Subscription and Sale and Transfer and Selling Restrictions”.

Notes denominated in NOK may not be offered, sold or delivered within Norway or to or for the benefit of persons domiciled in Norway, unless in compliance with the regulations relating to the offer of VPS Notes and the registration in the VPS of VPS Notes.

All references in this document to “U.S. dollars” and “U.S.$” refer to United States dollars, all references to “NOK” refer to Norwegian Kroner, all references to “Sterling” and “£” refer to pounds sterling, all references to “yen” refer to Japanese Yen, all references to “SEK” refer to Swedish Kroner and all references to “euro” and “€” refer to the currency introduced at the start of the third stage of European economic and monetary union pursuant to the Treaty on the Functioning of the European Union, as amended.

This Base Prospectus does not constitute an offer to sell or the solicitation of an offer to buy any Notes in any jurisdiction to any person to whom it is unlawful to make the offer or solicitation in such jurisdiction. The distribution of this Base Prospectus and the offer or sale of Notes may be restricted by law in certain jurisdictions. The Issuer, the Ordinary Note Arranger, the VPS Note Arranger and the Dealers do not represent that this Base Prospectus may be lawfully distributed, or that any Notes may be lawfully offered, in compliance with any applicable registration or other requirements in any such jurisdiction, or pursuant to an exemption available thereunder, or assume any responsibility for facilitating any such distribution or offering. In particular, no action has been taken by the Issuer, the Ordinary Note Arranger, the VPS Note Arranger or the Dealers which would permit a public offering of any Notes or distribution of this document in any

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jurisdiction where action for that purpose is required. Accordingly, no Notes may be offered or sold, directly or indirectly, and neither this Base Prospectus nor any advertisement or other offering material may be distributed or published in any jurisdiction, except under circumstances that will result in compliance with any applicable laws and regulations. Persons into whose possession this Base Prospectus or any Notes may come must inform themselves about, and observe, any such restrictions on the distribution of this Base Prospectus and the offering and sale of Notes. In particular, there are restrictions on the distribution of this Base Prospectus and the offer or sale of Notes in the United States, the EEA (including the United Kingdom and Norway) and Japan, see “Subscription and Sale and Transfer and Selling Restrictions”.

This Base Prospectus has been prepared on the basis that, except to the extent sub-paragraph (ii) below may apply, any offer of Notes in any Member State of the EEA which has implemented the Prospectus Directive (each, a “Relevant Member State”) will be made pursuant to an exemption under the Prospectus Directive, as implemented in that Relevant Member State, from the requirement to publish a prospectus for offers of Notes. Accordingly any person making or intending to make an offer in that Relevant Member State of Notes which are the subject of a placement contemplated in this Base Prospectus as completed by Final Terms in relation to the offer of those Notes may only do so (i) in circumstances in which no obligation arises for the Issuer, the Ordinary Note Arranger, the VPS Note Arranger or any Dealer to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive, in each case, in relation to such offer, or (ii) if a prospectus for such offer has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State and (in either case) published, all in accordance with the Prospectus Directive, provided that any such prospectus has subsequently been completed by final terms which specify that offers may be made other than pursuant to Article 3(2) of the Prospectus Directive in that Relevant Member State and such offer is made in the period beginning and ending on the dates specified for such purpose in such prospectus or final terms, as applicable. Except to the extent sub-paragraph (ii) above may apply, neither the Issuer, the Ordinary Note Arranger, the VPS Note Arranger nor any Dealer have authorised, nor do they authorise, the making of any offer of Notes in circumstances in which an obligation arises for the Issuer, the Ordinary Note Arranger, the VPS Note Arranger or any Dealer to publish or supplement a prospectus for such offer.

PROHIBITION OF SALES TO EEA RETAIL INVESTORS – The Notes are not intended, from 1 January 2018, to be offered, sold or otherwise made available to and, with effect from such date, should not be offered, sold or otherwise made available to any retail investor in the EEA. For these purposes, a “retail investor” means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (“MiFID II”); or (ii) a customer within the meaning of Directive 2002/92/EC (“IMD”), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II. Consequently no key information document required by Regulation (EU) No 1286/2014 (the “PRIIPs Regulation”) for offering or selling the Notes or otherwise making them available to retail investors in the EEA has been prepared and therefore offering or selling the Notes or otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPS Regulation.

The Notes may not be a suitable investment for all investors

Each potential investor in the Notes must determine the suitability of that investment in light of its own circumstances. In particular, each potential investor should:

(i) have sufficient knowledge and experience to make a meaningful evaluation of the Notes, the merits and risks of investing in the Notes and the information contained in this Base Prospectus or any applicable supplement;

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(ii) have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its particular financial situation, an investment in the Notes and the impact the Notes will have on its overall investment portfolio;

(iii) have sufficient financial resources and liquidity to bear all of the risks of an investment in the Notes, including Notes with principal or interest payable in one or more currencies, or where the currency for principal or interest payments is different from the potential investor’s currency;

(iv) understand thoroughly the terms of the Notes and be familiar with the behaviour of any relevant indices and financial markets; and

(v) understand that an investment in the Notes involves a reliance on the creditworthiness of the Issuer and its subsidiaries only and not that of any other entities; and

(vi) be able to evaluate (either alone or with the help of a financial adviser) possible scenarios for economic, interest rate and other factors that may affect its investment and its ability to bear the applicable risks.

Some Notes are complex financial instruments. Sophisticated institutional investors generally do not purchase complex financial instruments as stand-alone investments. They purchase complex financial instruments as a way to reduce risk or enhance yield with an understood, measured, appropriate addition of risk to their overall portfolios. A potential investor should not invest in the Notes which are complex financial instruments unless it has the expertise (either alone or with a financial adviser) to evaluate how the Notes will perform under changing conditions, the resulting effects on the value of the Notes and the impact the investment will have on the potential investor’s overall investment portfolio.

In connection with the issue of any Tranche of Notes, the Dealer or Dealers (if any) named as the Stabilising Manager(s) (or persons acting on behalf of any Stabilising Manager(s)) in the applicable Final Terms may over-allot Notes or effect transactions with a view to supporting the market price of the Notes at a higher level than that which might otherwise prevail. However, stabilisation may not necessarily occur. Any stabilisation action may begin on or after the date on which adequate public disclosure of the terms of the offer of the relevant Tranche of Notes is made and, if begun, may cease at any time, but it must end no later than the earlier of 30 days after the issue date of the relevant Tranche of Notes and 60 days after the date of the allotment of the relevant Tranche of Notes. Any stabilisation action or over-allotment must be conducted by the relevant Stabilising Manager(s) (or person(s) acting on behalf of any Stabilising Manager(s)) in accordance with all applicable laws or rules.

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TABLE OF CONTENTS

Page

IMPORTANT NOTICE ....................................................................................................................................... i

RISK FACTORS ................................................................................................................................................ 2

GENERAL DESCRIPTION OF THE PROGRAMME ................................................................................... 16

DOCUMENTS INCORPORATED BY REFERENCE AND SUPPLEMENTS TO THE BASE PROSPECTUS......................................................................................................................................... 25

USE OF PROCEEDS ....................................................................................................................................... 27

DESCRIPTION OF THE ISSUER’S BUSINESS ........................................................................................... 28

FORM OF THE NOTES .................................................................................................................................. 40

APPLICABLE FINAL TERMS ....................................................................................................................... 44

APPLICABLE PRICING SUPPLEMENT ...................................................................................................... 53

TERMS AND CONDITIONS OF THE ORDINARY NOTES ........................................................................ 64

TERMS AND CONDITIONS OF THE VPS NOTES ................................................................................... 102

TAXATION .................................................................................................................................................... 134

SUBSCRIPTION AND SALE AND TRANSFER AND SELLING RESTRICTIONS ................................. 137

BOOK-ENTRY CLEARANCE SYSTEMS ................................................................................................... 142

GENERAL INFORMATION ......................................................................................................................... 143

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RISK FACTORS

This section describes the principal risk factors associated with an investment in the Notes. Prospective purchasers of Notes should consider carefully all the information contained in this document, including the considerations set out below and all documents incorporated by reference herein, before making any investment decision.

Any investment in the Notes issued under the Programme will involve risks including those described in this section. All principal or material risks in relation to the Issuer and any investment in the Notes are included in this section. The risks and uncertainties described below are not the only ones that the Issuer may face. Additional risks and uncertainties that the Issuer is unaware of, or that the Issuer currently deems to be immaterial, may also become important risk factors that affect it or the Notes. Prospective investors should carefully consider the following discussion of the risk factors and the other information in this Base Prospectus (including the documents incorporated by reference herein) before deciding whether an investment in the Notes is suitable for them.

As at the date of this Base Prospectus, the Issuer believes that the following risk factors may affect the Issuer’s ability to fulfil its obligations and could be material for the purpose of assessing the market risks associated with the Notes.

If any of the listed or unlisted risks actually occurs, the Issuer’s business, operations, financial condition or reputation could be materially adversely affected, with the result that the trading price of the Notes of the Issuer could decline and an investor could lose all or part of its investment. These factors are contingencies that may or may not occur and the Issuer is not in a position to express a view on the likelihood of any such contingency occurring. Prospective investors should also read the detailed information set out elsewhere in this Base Prospectus (including the documents incorporated by reference herein) and reach their own views prior to making any investment decision.

Factors that may affect the Issuer’s ability to fulfil its obligations under Notes issued under the Programme

Economic activity in Norway

The Issuer’s business activities are dependent on the level of financial services required by its customers. Such requirements are heavily dependent on customer confidence, employment, state of the market and also interest rates. The Issuer conducts the majority of its business in Norway, with a focus upon the geographies outlined in “Description of the Issuer’s Business” below. The Issuer’s performance is impacted by the general level and cyclicality of business in Norway, which is in turn affected by both domestic and international political events.

Disruptions in the global credit markets and economy

Financial markets are subject to periods of historic volatility that may impact the Issuer’s ability to raise debt in a similar manner and at a similar cost to historic funding. Challenging market conditions have resulted in reduced liquidity, a widening of credit spreads and a lack of price transparency in the credit markets. Changes in investment markets, including in interest rates, exchange rates and returns from equity, property and other investments may affect the financial performance of the Issuer.

Risks relating to the business of the Issuer and the industry in which the Issuer operates

The Issuer’s business and financial performance will be affected by general economic conditions in Norway and elsewhere, and any adverse developments in Norway or global economic and financial markets could

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cause its earnings and profitability to decline. As the Issuer’s revenue is derived almost entirely from customers based in Norway, the Issuer and the SR-Bank Group are directly and indirectly subject to the inherent risks arising from general economic conditions in Norway, other economies which impact the Norwegian economy and the state of the Norwegian and global financial markets both generally and as they specifically affect financial undertakings.

Lower oil prices and reduced activity in industry have contributed to a lower growth in the Norwegian economy in recent years. According to Statistics Norway, Norwegian GDP growth in 2016 was 1.1 per cent1.

During the first quarter of 2016, Norges Bank (Norway’s central bank) lowered its key policy rate from 0.75 to 0.5 per cent., and it has remained unchanged since.

The labour market is characterised by lower activity in the petroleum sector and weaker growth in the Norwegian economy. Employment rates are developing differently in different parts of the country, depending on their connections to the oil sector. At the end of 2016, the registered unemployment rate in Norway was 2.8 per cent, while it was 4.5 per cent in Rogaland and 3.4 per cent in Hordaland and the Agder counties2.

If the Norwegian economy weakens or if financial markets exhibit uncertainty and/or volatility, this could result in a negative impact on consumers’ disposable income, confidence and spending, as well as the demand for credit both in the retail and corporate markets. This could in turn have a material adverse impact on the Issuer’s business, financial condition, results of operations and/or prospects.

Adverse global economic developments have affected and may continue to affect the Issuer’s business in a number of ways, including by adversely affecting the income, wealth, liquidity, business and/or financial condition of its customers, which in turn could have a material adverse effect on the Issuer’s business, financial condition and results of operations. Should the conditions in the global economy worsen, the macroeconomic risks faced by the Issuer may have an adverse impact on consumer confidence, spending and/or demand for credit in Norway, any of which could have material adverse effect on the Issuer’s business, financial condition, results of operations and/or prospects. Market volatility has a material adverse impact on the ability of financial undertakings to access the wholesale funding markets. If such access becomes difficult, this may have a material adverse impact on the SR-Bank Group.

Credit Risk

Credit risk is the most significant risk facing the Issuer and the SR-Bank Group, and is defined as the risk of loss resulting from a borrower or counterparty not fulfilling its obligations and any collateral not covering the outstanding claim.

Adverse changes in the creditworthiness of the SR-Bank Group’s counterparties and borrowers or any reduction in the value of collateral or other security obtained by the SR-Bank Group may have an adverse impact on the SR-Bank Group’s financial results and creditworthiness. As regards its exposure to personal borrowers, both individuals’ and households’ creditworthiness is affected by a variety of factors such as the state of the economy in general, adverse changes in the level of employment, and real estate values.

The SR-Bank Group’s exposure to corporate and other institutional customers is subject to adverse changes in these entities’ credit quality, whether as a result of shifts in supply and demand, local, regional or global economic downturns, or for other reasons.

1 Source: https://www.ssb.no/en/nasjonalregnskap-og-konjunkturer/statistikker/knr/kvartal 2 Source: https://www.nav.no/no/NAV+og+samfunn/Statistikk/Arbeidssokere+og+stillinger+-+statistikk/Hovedtall+om+arbeidsmarkedet

https://www.ssb.no/en/nasjonalregnskap-og-konjunkturer/statistikker/knr/kvartal

https://www.nav.no/no/NAV+og+samfunn/Statistikk/Arbeidssokere+og+stillinger+-+statistikk/Hovedtall+om+arbeidsmarkedet

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Credit losses vary over the business cycle, and there is currently a risk of increased credit losses in the current economic environment in particular as a result in the downturn in the oil market. As several markets remain challenging in the aftermath of the financial crisis in recent years, credit risk associated with certain borrowers and counterparties in affected markets remains heightened.

The SR-Bank Group routinely executes transactions with counterparties in the financial services industry, including brokers and dealers, commercial banks, investment banks, funds and other institutional and corporate clients. Many of these transactions expose the SR-Bank Group to the risk that the SR-Bank Group’s counterparty defaults on its obligations prior to maturity when the SR-Bank Group has an outstanding claim against that counterparty.

Credit risk may also be exacerbated when the collateral held by the SR-Bank Group cannot be realised or is liquidated at prices not sufficient to recover the full amount of the counterparty exposure.

Even though the SR-Bank Group’s credit policy includes guidelines, requirements and quantitative limits, losses due to default by borrowers or counterparties may occur. Losses suffered by the SR-Bank Group due to borrower or counterparty default may have an adverse impact on the Issuer’s results of operations, financial condition and business prospects, and its ability to perform its obligations under the Notes.

The SR-Bank Group maintains allowances for loan losses to cover estimated probable incurred credit impairments inherent in its loan portfolio. The SR-Bank Group’s calculation of the allowance for losses on loans is based on, among other things, its analysis of current and historical delinquency rates and loan management, its customers’ likely repayment capacity and the valuation of the underlying assets, as well as numerous other management assumptions. These internal analyses and assumptions may give rise to inaccurate predictions of credit performance and any material increase in impairment loss on loans and other commitments could have a material adverse effect on the SR-Bank Group’s financial condition.

Market Risk

Market risk is the risk of losses due to unfavourable changes in market variables, such as interest rates, exchange rates and credit spreads.

The Issuer and the SR-Bank Group are exposed to the following market risks:

• Interest rate risk: the risk of loss resulting from a general change in market rates.

• Exchange rate risk: the risk of loss resulting from changes in exchange rates.

• Credit spread risk: the risk that interest-bearing securities will fall in value as a result of an increase in the credit spread for corresponding credit instruments in the market. The Issuer calculates its exposure to credit spread risk in accordance with the FSAN practice for the assessment of risk and capital adequacy (circular 12/2016).

• Share price risk: the risk of loss resulting from a fall in share prices.

Although the SR-Bank Group has limited risk exposure to equities and the majority of lending provided by the SR-Bank Group has variable interest rates, the Issuer would be exposed to a potential loss if one or more of the market risks outlined above should manifest itself.

The Issuer may use hedging instruments such as interest and currency swaps in order to mitigate such market risk in the future. If so, the Issuer may become dependent on a liquid hedging market to mitigate its foreign exchange and interest rate risks and there are no assurances that the Issuer will be successful in hedging all of its foreign exchange and interest rate risks.

Liquidity Risk

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Liquidity risk comprises refinancing risk and price risk:

• Refinancing risk is the risk of the Issuer being unable to refinance its obligations as they fall due for payment.

• Price risk is the risk of the Issuer being unable to refinance its obligations without a material rise in costs.

A substantial part of the Issuer’s and the SR-Bank Group’s liquidity and funding requirements are met through reliance on customer deposits, as well as ongoing access to wholesale lending markets, including issuance of long-term debt market instruments such as covered bonds. The volume of these funding sources, in particular long-term funding, may be constrained during periods of liquidity stress. Turbulence in the global financial markets and economy may adversely affect the SR-Bank Group’s liquidity and the willingness of certain counterparties and customers to do business with the SR-Bank Group.

Liquidity risk is managed such that the Issuer minimises its financing costs, at the same time as the refinancing risk is kept within the Board of Directors’ specified risk appetite.

Liquidity risk is managed at SR-Bank Group level, at individual company level and for each individual transaction.

The Issuer measures liquidity risk over the short and long term. Short-term risk measures include the liquidity coverage ratio (LCR), and internal stress tests. The main long-term measure is the net stable funding ratio (NSFR). The LCR and NSFR are measured in accordance with methodology established by the FSAN.

The SR-Bank Group maintains a liquidity portfolio comprising liquid funds managed by the Treasury department and which qualify, or will qualify, as collateral at Norges Bank or other central banks. The liquidity portfolio is used to even out fluctuations in the SR-Bank Group’s liquidity requirements.

Notwithstanding the above, and even though the SR-Bank Group’s liquidity strategy specifies guidelines and includes requirements of composition of the funding structure and liquidity reserve, the inability of the SR-Bank Group to anticipate and provide for unforeseen decreases or changes in funding could have adverse consequences on the Issuer’s ability to meet its obligations (including under the Notes) as and when they fall due.

Operational Risk

Operational risk means unexpected fluctuations in results which are attributable to inadequacies or failures in internal processes and systems, by employees or external events, which oblige the Issuer and the SR-Bank Group to retain financial capital in order to safeguard against substantial and unexpected operational losses. The definition also includes legal risk, i.e. the risk that an agreement or legal action cannot be performed in line with underlying assumptions; and compliance risk, i.e. the risk of non-compliance with statutory provisions, internal guidelines, industry standards, etc., as well as reputation risk.

The Issuer’s and the SR-Bank Group’s policy for operational risk, including contingency plans, describes preventive and mitigating measures. In addition to policies and instructions, and procedure and job descriptions, the Issuer has a self-evaluation process for operational risk. This process is intended to identify operational risk and quantify any potential ensuing losses. This work results in action plans whose implementation is subject to ongoing monitoring. The evaluation is performed on a continuous basis.

As stated above, the Issuer has a documented process for conducting risk assessments. The process also includes the area of ICT (Information and Communication Technology) and determines an acceptable level of risk, performs assessments, and manages risk by delegating responsibility for monitoring. Reviews of risks

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and conditions relevant to ICT security are conducted and reported on a quarterly basis together with other risk areas related to operational risk.

Although the Issuer’s operational risk is monitored by regular qualitative assessments, the occurrence of such actions or events may have an adverse impact on the Issuer’s results of operations, financial condition and business prospects and its ability to perform its obligations under the Notes.

Commercial Risk

Commercial risk is the risk that earnings will weaken and is largely attributable to the following risk factors: changes in volumes, interest margins and other price changes associated with borrowing and lending; weakened net commission income; and earnings that are insufficient to cover costs.

Measurement of commercial risk takes into account changes due to credit losses and other risks such as market risk, liquidity risk and operational risk. The size of commercial risk is essentially affected by variations in net interest and commission. Some costs vary in line with volume- and transaction-based changes in income, other costs are deemed to be variable without being volume- or transaction-based, while further costs are deemed to be fixed. Management’s short-term opportunities to influence potential losses of income depend on the ratio of variable to fixed costs.

Commercial risk is managed through diversification of income, stable revenue generation and cost control. The Issuer’s definition of strategic risk is long-term risk that arises as a result of erroneous or ill-conceived commercial decisions, poor or incorrect implementation of decisions, or inadequate responsiveness to changes in society, competition, technology, the regulatory system or the financial sector.

The Issuer reviews and analyses its mortgage and commercial portfolio on a monthly basis and classifies all customers according to their credit quality. Credit quality is based on the customer’s current financial situation as well as future prospects. If there is objective evidence that an impairment loss on loans has incurred, the Issuer and the SR-Bank Group recognise the loss in profit or loss in accordance with International Financial Reporting Standards (“IFRS”). Calculations of impairment losses on loans are based on information available, assumptions and estimates, and are, as such, subject to uncertainty.

Although the Issuer has systems in place for managing commercial risks as outlined above, any adverse development in loan volumes, interest margins and other price changes associated with borrowing and lending as well as weakened net commission income may have an adverse impact on the Issuer’s results of operations, financial condition and business prospects and its ability to perform its obligations under the Notes.

Competition

The Issuer’s and the SR-Bank Group’s business is subject to risks related to its competitive position in the market. In particular, the Issuer faces fierce competition in the Norwegian retail and commercial banking markets. The Issuer may face pricing pressure in certain areas of its operations in the future as competitors seek to increase market share by reducing prices or offering new services at low prices. There can be no assurance that increased competition will not adversely affect the Issuer’s future results of operations, financial condition and business prospects and its ability to perform its obligations under the Notes.

Reliance on credit ratings

Credit ratings affect the cost and other terms upon which the Issuer is able to obtain funding. One or more independent rating agencies regularly evaluate the Issuer and issue ratings based on a number of factors, including the Issuer’s perceived financial strength as well as conditions affecting the financial services industry generally. A negative outlook could negatively affect the ratings. The failure by the Issuer to maintain its ratings would likely increase its cost of funding and adversely affect its interest margins. Any downgrade

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of the Issuer’s ratings could increase its borrowing costs, limit its access to capital markets and adversely affect its ability to sell or market its products, engage in business transactions and retain its customers. This, in turn, could reduce the Issuer’s liquidity and have an adverse effect on its operating results and financial condition.

Regulatory risk

The Issuer is regulated by the FSAN. The regulatory regime requires the Issuer to be compliant across many aspects of its business, including, but not limited to, capital adequacy, solvency margin, the training, authorisation and supervision of personnel, systems, processes and documentation. If the Issuer fails to be compliant with relevant regulations, there is a risk of an adverse impact on the business of the Issuer, its results of operations and/or financial condition due to sanctions, fines or other action imposed by the regulatory authorities. Regulatory proceedings or investigations could also result in adverse publicity for, or negative perceptions regarding, the Issuer, as well as diverting management's attention away from the day-to-day management of the business.

In addition, financial services laws, regulations and policies currently affecting the Issuer may change at any time and any such change may have a material adverse effect on the Issuer's business. Furthermore, the Issuer will not always be able to predict the impact of future Norwegian legislation or regulation, or changes in the interpretation or operation of existing legislation or regulation on its business, results of operations and/or financial condition. Further changes to Norwegian financial services legislation or regulations may be enacted and such changes could have a material adverse effect on the Issuer’s business, results of operations and/or financial condition and may result in increased costs to the Issuer due to it being required to set up additional compliance controls or due to the direct costs of compliance.

Risk relating to changes in the Issuer’s accounting policies or in accounting

From time to time, the International Accounting Standards Board, the European Union and other regulatory bodies may change the financial accounting and reporting standards that govern the preparation of the Issuer's consolidated financial statements. These changes can be difficult to predict and can materially impact how the Issuer records and reports its results of operations and financial condition. In some cases, the Issuer could be required to apply a new or revised standard retrospectively, resulting in the restatement of prior period consolidated financial statements. For example, IFRS 9 Financial Instruments will replace the current IAS 39 Financial Instruments: Recognition and Measurement from 1 January 2018. This will affect, among other things, how the SR-Bank Group calculates impairment losses. According to the current rules under IAS 39, impairment losses must only be made when objective evidence exists that a loss event has happened after initial recognition. According to IFRS 9 though, impairment losses must be recognised based on expected credit losses (ECL). In the last year, the Issuer has worked on models and adapting to the new regulations. This work will continue throughout 2017. Based on a preliminary review, the transition to IFRS 9 is not expected to have a significant effect on the SR-Bank Group’s financial position. However, as of the date of this Base Prospectus, the Issuer has not yet finalised the impact assessment of the implementation of IFRS 9 and, therefore, it is not yet possible for the Issuer to estimate the effect of IFRS 9 on its consolidated financial statements.

Factors which are material for the purpose of assessing the market risks associated with Notes issued under the Programme

A wide range of Notes may be issued under the Programme. A number of these Notes may have features which contain particular risks for potential investors. Set out below is a description of the most common such features, distinguishing between factors which may occur in relation to any Notes and those which might occur in relation to certain types of Exempt Notes:

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Risks applicable to all Notes

If the Issuer has the right to redeem any Notes at its option, this may limit the market value of the Notes concerned and an investor may not be able to reinvest the redemption proceeds in a manner which achieves a similar effective return.

An optional redemption feature is likely to limit the market value of Notes. During any period when an Issuer may elect to redeem Notes, the market value of those Notes generally will not rise substantially above the price at which they can be redeemed. This also may be true prior to any redemption period. The Issuer may be expected to redeem Notes when its cost of borrowing is lower than the interest rate on the Notes. At those times, an investor generally would not be able to reinvest the redemption proceeds at an effective interest rate as high as the interest rate on the Notes being redeemed and may only be able to do so at a significantly lower rate. Potential investors should consider reinvestment risk in light of other investments available at that time.

If the Issuer has the right to convert the interest rate on any Notes from a fixed rate to a floating rate, or vice versa, this may affect the secondary market and the market value of the Notes concerned.

Fixed/Floating Rate Notes are Notes which may bear interest at a rate that converts from a fixed rate to a floating rate, or from a floating rate to a fixed rate. Where the Issuer has the right to effect such a conversion, this will affect the secondary market in, and the market value of, the Notes since the Issuer may be expected to convert the rate when it is likely to result in a lower overall cost of borrowing for the Issuer. If the Issuer converts from a fixed rate to a floating rate in such circumstances, the spread on the Fixed/Floating Rate Notes may be less favourable than then prevailing spreads on comparable Floating Rate Notes tied to the same reference rate. In addition, the new floating rate at any time may be lower than the rates on other Notes. If the Issuer converts from a floating rate to a fixed rate in such circumstances, the fixed rate may be lower than then prevailing market rates.

Notes which are issued at a substantial discount or premium may experience price volatility in response to changes in market interest rates.

The market values of securities issued at a substantial discount (such as Zero Coupon Notes) or premium to their principal amount tend to fluctuate more in relation to general changes in interest rates than do prices for more conventional interest-bearing securities. Generally, the longer the remaining term of such securities, the greater the price volatility as compared to more conventional interest-bearing securities with comparable maturities.

Risks applicable to certain types of Exempt Notes

There are particular risks associated with an investment in certain types of Exempt Notes, such as Index Linked Notes and Dual Currency Notes. In particular, an investor might receive less interest than expected or no interest in respect of such Notes and may lose some or all of the principal amount invested by it.

The Issuer may issue Notes with principal or interest determined by reference to an index or formula, to changes in the prices of securities or commodities, to movements in currency exchange rates or other factors (each, a “Relevant Factor”). In addition, the Issuer may issue Notes with principal or interest payable in one or more currencies which may be different from the currency in which the Notes are denominated. Potential investors should be aware that:

(i) the market price of such Notes may be volatile;

(ii) they may receive no interest;

(iii) payment of principal or interest may occur at a different time or in a different currency than expected;

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(iv) they may lose all or a substantial portion of their principal;

(v) a Relevant Factor may be subject to significant fluctuations that may not correlate with changes in interest rates, currencies or other indices;

(vi) if a Relevant Factor is applied to Notes in conjunction with a multiplier greater than one or contains some other leverage factor, the effect of changes in the Relevant Factor on principal or interest payable will likely be magnified; and

(vii) the timing of changes in a Relevant Factor may affect the actual yield to investors, even if the average level is consistent with their expectations. In general, the earlier the change in the Relevant Factor, the greater the effect on yield.

The historical experience of an index or other Relevant Factor should not be viewed as an indication of the future performance of such Relevant Factor during the term of any Notes. Accordingly, each potential investor should consult its own financial and legal advisers about the risks entailed by an investment in any Notes linked to a relevant Factor and the suitability of such Notes in light of its particular circumstances.

Where Notes are issued on a partly paid basis, an investor who fails to pay any subsequent instalment of the issue price could lose all of his investment.

The Issuer may issue Notes where the issue price is payable in more than one instalment. Any failure by an investor to pay any subsequent instalment of the issue price in respect of his Notes could result in such investor losing all of his investment.

Notes which are issued with variable interest rates or which are structured to include a multiplier or other leverage factor are likely to have more volatile market values than more standard securities.

Notes with variable interest rates can be volatile investments. If they are structured to include multipliers or other leverage factors, or caps or floors, or any combination of those features or other similar related features, their market values may be even more volatile than those for securities that do not include those features.

Inverse Floating Rate Notes will have more volatile market values than conventional Floating Rate Notes.

Inverse Floating Rate Notes have an interest rate equal to a fixed rate minus a rate based upon a reference rate such as LIBOR. The market values of those Notes are typically more volatile than the market values of other conventional floating rate debt securities based on the same reference rate (and with otherwise comparable terms). Inverse Floating Rate Notes are more volatile because an increase in the reference rate not only decreases the interest rate of the Notes, but may also reflect an increase in prevailing interest rates, which further adversely affects the market value of these Notes.

Risks applicable to Subordinated Notes

The Issuer’s obligations under Subordinated Notes are subordinated

The Issuer’s obligations under Subordinated Notes will be unsecured and subordinated and will rank junior in priority of payment to the claims of all unsubordinated creditors of the Issuer and to claims with greater priority than Tier 2 capital or which are preferred under Norwegian law (as set out in Condition 2(b) of the Ordinary Note Conditions and Condition 2(b) of the VPS Conditions, respectively).

Although Subordinated Notes may pay a higher rate of interest than comparable Notes which are not subordinated, there is a real risk that an investor in Subordinated Notes will lose all or some of his investment should the Issuer become insolvent.

In certain circumstances some or all of the principal amount of any Subordinated Notes may be cancelled

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Under Norwegian legislation, if the Issuer’s most recent audited accounts reveal that its net assets are less than 25 per cent. of its share capital and share premium reserve, the general meeting of the Issuer can, or the relevant Norwegian authorities can if the general meeting of the Issuer does not do so: first, cancel the Issuer’s share capital and share premium reserve to compensate for the shortfall, and secondly, if any remaining shortfall exceeds a substantial part (as determined by the general meeting of the Issuer or the relevant Norwegian authorities) of the Issuer’s subordinated loan capital, cancel, in whole or in part, such subordinated loan capital (which would include principal and interest in respect of all Subordinated Notes).

There are no events of default in relation to Subordinated Notes

If the Issuer fails to pay interest or principal when due on any Subordinated Note, the holders of such Notes shall not be entitled to bring proceedings against the Issuer for payment of such amounts.

Risks related to Notes generally

Set out below is a description of material risks relating to the Notes generally:

Defined majorities of Noteholders may approve modifications to or waivers in respect of the Notes.

The conditions of the Notes contain provisions which may permit their modification without the consent of all investors. The conditions of the Notes contain provisions for calling meetings of Noteholders to consider matters affecting their interests generally. These provisions permit defined majorities to bind all Noteholders including Noteholders who did not attend and vote at the relevant meeting and Noteholders who voted in a manner contrary to the majority.

Withholding Tax White Paper/Potential Issuer Redemption for Tax Reasons

In a White Paper to the Norwegian Parliament in October 2015 (Meld. St. 4 (2015-2016)), the Government advised that it will look further into the possible introduction of a Norwegian withholding tax on interest. In due course, a detailed proposal is expected to be submitted for public consultation when ready.

If the withholding tax is implemented and the payments of interest in respect of an issue of Notes become subject to withholding tax, the Issuer would be required to gross up the payments in accordance with (but subject to the exceptions set out in) Condition 6 of the Ordinary Note Conditions and Condition 6 of the VPS Conditions. If the Issuer has or will become obliged to pay additional amounts as provided in Condition 6 of the Ordinary Note Conditions and/or Condition 6 of the VPS Conditions (as the case may be), the Issuer may (subject to the conditions set out therein) exercise its right to redeem the Notes at the Early Redemption Amount pursuant to Condition 5(c) of the Ordinary Note Conditions and Condition 5(c) of the VPS Conditions, respectively.

Notes may be subject to loss absorption on any application of the general bail-in tool or at the point of non-viability of the Issuer upon implementation of the BRRD in Norway.

On 2 July 2014, Directive 2014/59/EU providing for the establishment of an EU-wide framework for the recovery and resolution of credit institutions and investment firms (the “Bank Recovery and Resolution Directive” or “BRRD”) entered into force. The BRRD is designed to provide authorities with a credible set of tools to intervene sufficiently early and quickly in an unsound or failing institution so as to ensure the continuity of the institution’s critical financial and economic functions, while minimising the impact of an institution’s failure on the economy and financial system.

The BRRD contains four resolution tools and powers which may be used alone or in combination where the relevant resolution authority considers that (a) an institution is failing or likely to fail, (b) there is no reasonable prospect that any alternative private sector measures would prevent the failure of such institution within a reasonable timeframe, and (c) a resolution action is in the public interest: (i) sale of business - which

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enables resolution authorities to direct the sale of the firm or the whole or part of its business on commercial terms; (ii) bridge institution - which enables resolution authorities to transfer all or part of the business of the firm to a “bridge institution” (an entity created for this purpose that is wholly or partially in public control), which may limit the capacity of the firm to meet its repayment obligations; (iii) asset separation - which enables resolution authorities to transfer impaired or problem assets to one or more publicly owned asset management vehicles to allow them to be managed with a view to maximising their value through eventual sale or orderly wind-down (this can be used together with another resolution tool only); and (iv) bail-in - which gives resolution authorities the power to write down certain claims of unsecured creditors of a failing institution (which write-down may result in the reduction of such claims to zero) and to convert certain unsecured debt claims (including Notes) to equity or other instruments of ownership (the “general bail-in tool”), which equity or other instruments could also be subject to any future cancellation, transfer or dilution.

Under the BRRD there is a requirement for EU financial institutions to hold certain minimum levels of own funds and other eligible liabilities (“MREL”) which would be available to be written down or bailed-in in order to facilitate the rescue or resolution of the failing institution. Regulation (EU) 2016/1450 of 23 May 2016 supplementing Directive 2014/59/EU of the European Parliament and of the Council sets forth draft regulatory technical standards specifying the criteria relating to the methodology for setting the minimum requirement for own funds and eligible liabilities. These regulatory technical standards aim to specify the criteria to set the MREL laid down in the BRRD. They clarify how a financial institution’s capital requirements should be linked to the MREL needed to absorb losses and, where necessary, recapitalise a financial institution after resolution. Finally, the regulatory technical standards propose that for systemic institutions, resolution authorities should consider the potential need to be able to access resolution financing arrangements if a resolution relying solely on the financial institution’s own resources is not possible, and to assess whether the MREL would be sufficient to satisfy the pre-conditions set out in the BRRD for the use of such arrangements.

The BRRD also provides for a Member State as a last resort, after having assessed and exploited the above resolution tools to the maximum extent possible whilst maintaining financial stability, to be able to provide extraordinary public financial support through additional financial stabilisation tools. These consist of the public equity support and temporary public ownership tools. Any such extraordinary financial support must be provided in accordance with the EU state aid framework.

An institution will be considered as failing or likely to fail when: it is, or is likely in the near future to be, in breach of its requirements for continuing authorisation; its assets are, or are likely in the near future to be, less than its liabilities; it is, or is likely in the near future to be, unable to pay its debts as they fall due; or it requires extraordinary public financial support (except in limited circumstances).

In addition to the general bail-in tool, the BRRD provides for resolution authorities to have the further power to permanently write down or convert into equity capital instruments (such as the Subordinated Notes) at the point of non-viability and before any other resolution action is taken (“nonviability loss absorption”). Any shares issued to holders of the Subordinated Notes upon any such conversion into equity may also be subject to any application of the general bail-in tool or other powers under the BRRD.

Any application of the general bail-in tool under the BRRD shall be in accordance with the hierarchy of claims in normal insolvency proceedings. Accordingly, the impact of such application on holders of Notes will depend on their ranking in accordance with such hierarchy, including any priority given to other creditors such as depositors.

To the extent any resulting treatment of holders of Notes pursuant to the exercise of the general bail-in tool is less favourable than would have been the case under such hierarchy in normal insolvency proceedings, a holder has a right to compensation under the BRRD based on an independent valuation of the firm (which is

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referred to as the “no creditor worse off safeguard” under the BRRD). Any such compensation is unlikely to compensate that holder for the losses it has actually incurred and there is likely to be a considerable delay in the recovery of such compensation. Compensation payments (if any) are also likely to be made considerably later than when amounts may otherwise have been due under the Notes.

The powers set out in the BRRD will impact how credit institutions and investment firms are managed as well as, in certain circumstances, the rights of creditors.

The BRRD, under its terms, was required to be applied by EU Member States from 1 January 2015, except for the general bail-in tool which applies from 1 January 2016. It should be noted that Norway will not be directly bound by the BRRD before it has been implemented into the EEA Agreement and national Norwegian law. On 26 October 2016, the Norwegian Banking Law Commission published its proposal for implementation of the BRRD in Norwegian law. The proposal has been subject to a hearing, following which the Norwegian Ministry of Finance has delivered its proposal for final legislation to the Norwegian Parliament. It is expected that the proposed implementing legislation will be approved by Parliament during the second half of 2017 and enter into force shortly thereafter. The proposed implementing legislation is in line with the BRRD, and grants authority to the FSAN to implement detailed requirements and supplementary regulations in its capacity as resolution authority.

When the BRRD has been implemented in Norway, holders of Notes may be subject to the application of the general bail-in tool, which may result in such holders losing some or all of their investment. Such application could also involve modifications, including alteration of the principal amount or any interest payable on the Notes, the maturity date or any other dates on which payments may be due, as well as the suspension of payments for a certain period, to or the disapplication of provisions in, the Terms and Conditions of the Notes. As a result, the exercise of any power under the BRRD or any suggestion of such exercise could materially adversely affect the rights of Noteholders, the price or value of their investment in any Notes and/or the ability of the Issuer to satisfy its obligations under any Notes.

In addition, the market price of the Notes could be adversely affected by the implementation or proposed implementation of the BRRD in Norway and/or, following any such implementation, by any actual or anticipated use of the powers thereunder in respect of the Issuer and/or the Notes. Any action taken under such legislation in respect of the Issuer could also affect the ability of the Issuer to satisfy its obligations under the Notes.

As it remains uncertain how and when the BRRD will be implemented in Norway, and in any event the Norwegian authorities could elect to adopt more onerous provisions than required under the EU legislation, it is difficult to anticipate the potential implications for the Issuer or the Notes.

The value of the Notes could be adversely affected by a change in English or Norwegian law or administrative practice.

The Ordinary Note Conditions (except for Condition 2(b)) and the VPS Conditions (except for Conditions 2(b), 8, 9, 10, 11, 12 and 13) are based on English law in effect as at the date of this Base Prospectus. No assurance can be given as to the impact of any possible judicial decision or change to English law or administrative practice after the date of this Base Prospectus and any such change could materially adversely impact the value of any Notes affected by it.

Condition 2(b) of the Ordinary Note Conditions and Conditions 2(b), 8, 9, 10, 11, 12 and 13 of the VPS Conditions are based on Norwegian law in effect as at the date of this Base Prospectus. No assurance can be given as to the impact of any possible judicial decision or change to Norwegian law or administrative practice after the date of this Base Prospectus and any such change could materially adversely impact the value of any Notes affected by it.

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Investors who hold less than the minimum Specified Denomination may be unable to sell their Notes and may be adversely affected if definitive Notes are subsequently required to be issued.

In relation to any issue of Notes which have denominations consisting of a minimum Specified Denomination plus one or more higher integral multiples of another smaller amount, it is possible that such Notes may be traded in amounts in excess of the minimum Specified Denomination that are not integral multiples of such minimum Specified Denomination. In such a case a holder who, as a result of trading such amounts, holds an amount which is less than the minimum Specified Denomination in his account with the relevant clearing system would not be able to sell the remainder of such holding without first purchasing a principal amount of Notes at or in excess of the minimum Specified Denomination such that his holding amounts to a Specified Denomination. Further, a holder who, as a result of trading such amounts, holds an amount which is less than the minimum Specified Denomination in his account with the relevant clearing system at the relevant time may not receive a definitive Note in respect of such holding (should definitive Notes be printed) and would need to purchase a principal amount of Notes at or in excess of the minimum Specified Denomination such that his holding amounts to a Specified Denomination.

If such notes in definitive form are issued, holders should be aware that definitive Notes that have a denomination that is not an integral multiple of the minimum Specified Denomination may be illiquid and difficult to trade.

Reform and Regulation of “benchmarks”.

So-called benchmarks such as the Euro Interbank Offered Rate (“EURIBOR”), ISDAFIX (now restructured and renamed the ICE Swap Rate), referenced swap rates and other indices which are deemed “benchmarks” (each a “Benchmark” and together, the “Benchmarks”), to which the interest on securities may be linked, have become the subject of regulatory scrutiny and recent national and international regulatory guidance and proposals for reform. Some of these reforms are already effective while others are still to be implemented. These reforms may cause the relevant benchmarks to perform differently than in the past, or have other consequences which may have a material adverse effect on the value of and amount payable under the Notes.

International proposals for reform of Benchmarks include the European Council’s regulation (EU) 2016/1011 on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds (the “Benchmark Regulation”) which was published in the official journal on 29 June 2016. In addition to the aforementioned regulation, there are numerous other proposals, initiatives and investigations which may impact Benchmarks.

Any changes to a Benchmark as a result of the Benchmark Regulation or other initiatives could increase the costs and risks of administering or otherwise participating in the setting of a Benchmark and complying with any such regulations or requirements. Such factors may have the effect of discouraging market participants from continuing to administer or participate in certain Benchmarks, trigger changes in the rules or methodologies used in certain Benchmarks or lead to the cessation of certain Benchmarks. Although it is uncertain whether or to what extent any of the abovementioned changes and/or any further changes in the administration or method of determining a Benchmark could have an effect on the value of the Notes, investors should be aware that they face the risk that any changes to (or the cessation of) the relevant Benchmark may have a material adverse effect on the value of and the amount payable under the Notes.

Risks related to the market generally

Set out below is a description of the material market risks, including liquidity risk, exchange rate risk, interest rate risk and credit risk:

An active secondary market in respect of the Notes may never be established or may be illiquid and this would adversely affect the value at which an investor could sell his Notes.

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Notes may have no established trading market when issued, and one may never develop. If a market for the Notes does develop, it may not be very liquid. Therefore, investors may not be able to sell their Notes easily or at prices that will provide them with a yield comparable to similar investments that have a developed secondary market. This is particularly the case for Notes that are especially sensitive to interest rate, currency or market risks, are designed for specific investment objectives or strategies or have been structured to meet the investment requirements of limited categories of investors. These types of Notes generally would have a more limited secondary market and more price volatility than conventional debt securities.

If an investor holds Notes which are not denominated in the investor’s home currency, he will be exposed to movements in exchange rates adversely affecting the value of his holding. In addition, the imposition of exchange controls in relation to any Notes could result in an investor not receiving payments on those Notes.

The Issuer will pay principal and interest on the Notes in the Specified Currency. This presents certain risks relating to currency conversions if an investor’s financial activities are denominated principally in a currency or currency unit (the “Investor’s Currency”) other than the Specified Currency. These include the risk that exchange rates may significantly change (including changes due to devaluation of the Specified Currency or revaluation of the Investor’s Currency) and the risk that authorities with jurisdiction over the Investor’s Currency may impose or modify exchange controls. An appreciation in the value of the Investor’s Currency relative to the Specified Currency would decrease (1) the Investor’s Currency-equivalent yield on the Notes, (2) the Investor’s Currency-equivalent value of the principal payable on the Notes and (3) the Investor’s Currency-equivalent market value of the Notes.

Government and monetary authorities may impose (as some have done in the past) exchange controls that could adversely affect an applicable exchange rate or the ability of the Issuer to make payments in respect of the Notes. As a result, investors may receive less interest or principal than expected, or no interest or principal.

The value of Fixed Rate Notes or Reset Notes may be adversely affected by movements in market interest rates.

Investment in Fixed Rate Notes or Reset Notes involves the risk that if market interest rates subsequently increase above the rate paid on the Fixed Rate Notes or Reset Notes, this will adversely affect the value of the Fixed Rate Notes or Reset Notes.

In addition, a holder of Reset Notes is also exposed to the risk of fluctuating interest rate levels and uncertain interest income.

Credit ratings assigned to the Issuer or any Notes may not reflect all the risks associated with an investment in those Notes.

One or more independent credit rating agencies may assign credit ratings the Issuer or to the Notes. The ratings may not reflect the potential impact of all risks related to structure, market, additional factors discussed above, and other factors that may affect the value of the Notes. A credit rating is not a recommendation to buy, sell or hold securities and may be revised, suspended or withdrawn by the rating agency at any time.

In general, European regulated investors are restricted under the CRA Regulation from using credit ratings for regulatory purposes, unless such ratings are issued by a credit rating agency established in the EU and registered under the CRA Regulation (and such registration has not been withdrawn or suspended), subject to transitional provisions that apply in certain circumstances whilst the registration application is pending. Such general restriction will also apply in the case of credit ratings issued by non-EU credit rating agencies, unless the relevant credit ratings are endorsed by an EU-registered credit rating agency or the relevant non-EU rating agency is certified in accordance with the CRA Regulation (and such endorsement action or certification, as

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the case may be, has not been withdrawn or suspended). The list of registered and certified rating agencies published by the European Securities and Markets Authority (“ESMA”) on its website in accordance with the CRA Regulation is not conclusive evidence of the status of the relevant rating agency included in such list, as there may be delays between certain supervisory measures being taken against a relevant rating agency and the publication of the updated ESMA list. Certain information with respect to the credit rating agencies and ratings is set out on the cover of this Base Prospectus.

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GENERAL DESCRIPTION OF THE PROGRAMME

The following description does not purport to be complete and is taken from, and is qualified in its entirety by, the remainder of this Base Prospectus and, in relation to the terms and conditions of any particular Tranche of Notes, the applicable Final Terms (or, in the case of Exempt Notes, the applicable Pricing Supplement). Words and expressions defined in “Form of the Notes” and “Terms and Conditions of the Ordinary Notes” and “Terms and Conditions of the VPS Notes” shall have the same meanings in this section. References to “Final Terms” shall be deemed to refer to the applicable Pricing Supplement where relevant.

This description constitutes a general description of the Programme for the purposes of Article 22.5(3) of Commission Regulation (EC) No 809/2004 implementing the Prospectus Directive (the “Prospectus Regulation”).

Issuer: SpareBank 1 SR-Bank ASA

The Issuer is a public limited liability company. The Issuer was incorporated in Norway on 1 October 1976 with registration number 937 895 321.

The Issuer is licensed by the Financial Supervisory Authority of Norway (“FSAN”) (Finanstilsynet) as a bank and investment firm. For a more detailed description of the Issuer, see “Description of the Issuer’s Business” and “Management of the Issuer” below.

Description: Euro Medium Term Note Programme

Ordinary Note Arranger: J.P. Morgan Securities plc

VPS Note Arranger: SpareBank 1 SR-Bank ASA

Dealers: Citigroup Global Markets Limited

Commerzbank Aktiengesellschaft

Credit Suisse Securities (Europe) Limited

Goldman Sachs International

HSBC Bank plc

J.P. Morgan Securities plc

Landesbank Baden-Württemberg

Nomura International plc

Société Générale

(in respect of the Ordinary Notes only)

and any other Dealers appointed in accordance with the Programme Agreement. Notes may also be issued to third parties.

Certain Restrictions: Each issue of Notes denominated in a currency in respect of which particular laws, guidelines, regulations, restrictions or reporting requirements apply will only be issued from time to time in circumstances which comply with such laws, guidelines, regulations, restrictions or reporting requirements (see “Subscription and Sale and Transfer and Selling

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Restrictions”) including the following restrictions applicable at the date of this Base Prospectus.

Notes having a maturity of less than one year:

Notes having a maturity of less than one year will, if the issue proceeds are accepted in the United Kingdom, constitute deposits for the purposes of the prohibition on accepting deposits contained in section 19 of the Financial Services and Markets Act 2000 (the “FSMA”) unless they are issued to a limited class of professional investors and have a denomination of at least £100,000 or its equivalent; see “Subscription and Sale and Transfer and Selling Restrictions”.

Under the Luxembourg Prospectus Law which implements the Prospectus Directive, prospectuses for the listing of money market instruments having a maturity at issue of less than 12 months and complying also with the definition of securities are not subject to the approval provisions of Part II of such law.

The approval of the Prospectus by the CSSF does not cover such money market instruments with a maturity of less than 12 months.

Registrar: Citigroup Global Markets Deutschland AG

Principal Paying Agent and Paying Agent:

Citibank, N.A., London Branch is the Principal Paying Agent. Banque Internationale à Luxembourg, société anonyme is a Paying Agent located in Luxembourg.

Transfer Agent: Citibank, N.A., London Branch

Calculation Agent: Citibank, N.A., London Branch (or such other person appointed as such in connection with any Series)

VPS Agent (in the case of VPS Notes): SpareBank 1 SR-Bank ASA

VPS Trustee (in the case of VPS Notes): Nordic Trustee ASA

Programme Size: Up to €10,000,000,000 (or its equivalent in other currencies calculated as described in the Programme Agreement) aggregate nominal amount of all Ordinary Notes and VPS Notes outstanding at any time. The Issuer may increase the amount of the Programme in accordance with the terms of the Programme Agreement.

Distribution: Notes may be distributed by way of private or public placement and in each case on a syndicated or non-syndicated basis.

Currencies: Notes may be denominated in Euro, Norwegian Kroner, U.S. dollars, Japanese Yen, Sterling, Swedish Kroner and, subject to any applicable legal or regulatory restrictions and any applicable requirements, any other currency agreed between the Issuer and the relevant Dealer.

Maturities: The Notes will have such maturities as may be agreed between the Issuer and the relevant Dealer, subject to such minimum or maximum maturities as may be allowed or required from time

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to time by the relevant central bank (or equivalent body) or any laws or regulations or directives applicable to the Issuer or the relevant Specified Currency. Unless otherwise permitted by the current laws, regulations and directives, Subordinated Notes will have a minimum maturity of at least five years.

Issue Price: Notes may be issued on a fully-paid or, in the case of Exempt Notes, a partly-paid basis and at an issue price which is at par or at a discount to, or premium over, par.

Form of Notes: The Notes may be issued in bearer form (in the case of Bearer Notes); registered form (in the case of Registered Notes); or in uncertificated book entry form (in the case of VPS Notes); as described in “Form of the Notes”.

Each Registered Note will be deposited on or around the relevant Issue Date with a common depositary or, where specified in the relevant Final Terms to be held under the new safekeeping structure (“NSS”), with a common safekeeper, as the case may be for Euroclear and/or Clearstream, Luxembourg and/or any other relevant clearing system.

Each Bearer Note will on issue be represented by a Temporary Global Note which will be exchangeable for a Permanent Global Note or, if so specified in the relevant Final Terms, for Definitive Notes.

Each Bearer Note (i) will either be issued in new global note form, as specified in the relevant Final Terms, and will be deposited on or around the relevant Issue Date with a common safekeeper for the International Central Securities Depositaries or (ii) will not be issued in new global note form, as specified in the relevant Final Terms, and will be deposited on or around the relevant Issue Date with a common depositary for the International Central Securities Depositaries.

VPS Notes will not be evidenced by any physical note or document of title. Entitlements to VPS Notes will be evidenced by crediting of VPS Notes to accounts with the VPS.

Registered Global Notes will be exchangeable for Registered Definitive Notes in the limited circumstances set out in “Form of the Notes” below.

Bearer Global Notes will be exchangeable for Bearer Definitive Notes in the limited circumstances set out in “Form of the Notes” below.

Fixed Rate Notes: Fixed interest will be payable on such date or dates as may be agreed between the Issuer and the relevant Dealer and on redemption, and will be calculated on the basis of such Day Count Fraction as may be agreed between the Issuer and the relevant Dealer.

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Floating Rate Notes: Floating Rate Notes will bear interest at a rate determined in the manner specified in the applicable Final Terms.

The margin (if any) relating to such Floating Rate Notes will be agreed between the Issuer and the relevant Dealer for each Series of Floating Rate Notes (as indicated in the applicable Final Terms).

Other provisions in relation to Floating Rate Notes:

Floating Rate Notes may also have a maximum interest rate or a minimum interest rate or both (as indicated in the applicable Final Terms).

Interest on Floating Rate Notes in respect of each Interest Period, as agreed prior to issue by the Issuer and the relevant Dealer, will be payable on such Interest Payment Dates, and will be calculated on the basis of such Day Count Fraction, as may be agreed between the Issuer and the relevant Dealer.

Reset Notes: Notes may have reset provisions pursuant to which the relevant Notes will, in respect of an initial period, bear interest at an initial fixed rate of interest specified in the applicable Final Terms. Thereafter, the fixed rate of interest will be reset on one or more date(s) by reference to a mid-market swap rate for the relevant Specified Currency, and for a period equal to the Reset Period, in each case as may be specified in the applicable Final Terms.

The margin (if any) in relation to Reset Notes will be agreed between the Issuer and the relevant Dealer(s) for each Series of Reset Notes and will be specified in the applicable Final Terms.

Interest on Reset Notes will be payable on such date or dates as may be agreed between the Issuer and the relevant Dealer(s) (as indicated in the applicable Final Terms) and on redemption, and will be calculated on the basis of such Day Count Fraction as may be agreed between the Issuer and the relevant Dealer(s).

Zero Coupon Notes: Zero Coupon Notes will be offered and sold at a discount to their nominal amount and will not bear interest.

Exempt Notes: The Issuer may issue Exempt Notes which are Index Linked Notes, Dual Currency Notes, Partly Paid Notes or Notes redeemable in one or more instalments.

Index Linked Notes: Payments of principal in respect of Index Linked Redemption Notes or of interest in respect of Index Linked Interest Notes will be calculated by reference to such index and/or formula or to changes in the prices of securities or commodities or to such other factors as the Issuer and the relevant Dealer may agree.

Dual Currency Notes: Payments (whether in respect of principal or interest and whether at maturity or otherwise) in

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respect of Dual Currency Notes will be made in such currencies, and based on such rates of exchange, as the Issuer and the relevant Dealer may agree.

Partly Paid Notes: The Issuer may issue Notes in respect of which the issue price is paid in separate instalments in such amounts and on such dates as the Issuer and the relevant Dealer may agree.

Notes redeemable in instalments: The Issuer may issue Notes which may be redeemed in separate instalments in such amounts and on such dates as the Issuer and the relevant Dealer may agree.

The Issuer may agree with any Dealer that Exempt Notes may be issued in a form not contemplated by the Terms and Conditions of the Notes, in which event the relevant provisions will be included in the applicable Pricing Supplement.

Redemption: The applicable Final Terms will indicate the scheduled maturity date (which in the case of Subordinated Notes, must be at least five years after the issue date) and will also indicate either that the relevant Notes cannot be redeemed prior to their stated maturity (other than in the case of Exempt Notes in specified instalments, if applicable, or for taxation reasons or (in the case of Unsubordinated Notes) following an Event of Default) or that such Notes will be redeemable at the option of the Issuer (which, in respect of Subordinated Notes, may not take place without the prior written consent of the FSAN) and/or the Noteholders (which, in respect of Subordinated Notes, may not take place without the prior written consent of the FSAN) in each case upon giving not less than 15 nor more than 30 days’ irrevocable notice (or such other notice period (if any) as is indicated in the applicable Final Terms) to the Noteholders or the Issuer, as the case may be, on a date or dates specified prior to such stated maturity and at a price or prices and on such other terms as may be agreed between the Issuer and the relevant Dealer.

Unless previously redeemed or purchased and cancelled, each Note which is not an Exempt Note will be redeemed by the Issuer at least at 100 per cent. of its nominal value on its scheduled maturity date.

Notes having a maturity of less than one year may be subject to restrictions on their denomination and distribution; see “Certain Restrictions — Notes having a maturity of less than one year” above.

Denomination of Notes: Notes will be issued in such denominations as may be agreed between the Issuer and the relevant Dealer save that the

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minimum denomination of each Note will be such as may be allowed or required from time to time by the relevant central bank (or equivalent body) or any laws or regulations applicable to the relevant Specified Currency; see “Certain Restrictions — Notes having a maturity of less than one year” above; and provided that the minimum denomination of each Note (other than an Exempt Note) will be €100,000 (or, if the Notes are denominated in a currency other than euro, the equivalent amount in such currency).

Taxation: All payments in respect of the Notes will be made without deduction for or on account of any present or future taxes or duties of whatever nature imposed by the Kingdom of Norway or any political subdivision or any authority thereof or therein having power to tax unless required by law, in which case, subject to certain exceptions and the Issuer’s right to redeem the affected Notes before their scheduled maturity, such additional amounts will also be paid as shall result in receipt by the Noteholders and Couponholders of such amounts as would have been received by them had no withholding or deduction been required.

Cross Default: The terms of the Unsubordinated Notes will contain a cross default provision as further described in Condition 8 of the Ordinary Note Conditions and Condition 8 of the VPS Conditions, respectively.

Subordinated Notes will not contain any events of default.

Status of the Unsubordinated Notes: The Unsubordinated Notes will constitute direct, unconditional, unsubordinated and unsecured obligations of the Issuer and will rank pari passu among themselves and (save for certain debts required to be preferred by law) equally with all other unsecured obligations (including deposits) (other than subordinated obligations, if any) of the Issuer, present and future, from time to time outstanding.

Status of the Subordinated Notes: The Subordinated Notes will constitute unsecured subordinated obligations of the Issuer and rank pari passu without any preference among themselves and at least equally with all other Tier 2 capital obligations of the Issuer (or any obligations which, by their terms, are expressed to rank pari passu with the Subordinated Notes), in each case whether actual or contingent and having a fixed maturity from time to time outstanding. The Subordinated Notes shall, in the event of a liquidation, dissolution, administration or other winding-up of the Issuer by way of public administration, be subordinated in right of payment only to the claims against the Issuer of all unsubordinated creditors of that Issuer and to claims with greater priority than Tier 2 capital or which are preferred under

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Norwegian law generally.

Subordinated Notes – Loss Absorption: Under Norwegian legislation, if the Issuer’s most recent audited accounts reveal that its net assets are less than 25 per cent. of its share capital and share premium reserve, the general meeting of the Issuer can, or the relevant authorities can if the general meeting of the Issuer does not do so: first, cancel the Issuer’s share capital and share premium reserve to compensate for the shortfall and secondly, if any remaining shortfall exceeds a substantial part (as determined by the general meeting of the Issuer or by the relevant Norwegian authorities) of the Issuer’s subordinated loan capital, cancel, in whole or in part, such subordinated loan capital (which would include principal and interest in respect of all Subordinated Notes).

To the extent that part only of the outstanding principal amount of any Subordinated Notes has been cancelled as provided above, interest will continue to accrue in accordance with the terms thereof on the then outstanding principal amount of such Subordinated Notes.

Negative Pledge: The terms of the Notes will not contain a negative pledge provision.

Listing approval and admission to trading:

Application has been made to the CSSF to approve this Base Prospectus. Application has also been made to the Luxembourg Stock Exchange for Ordinary Notes issued under the Programme within the period of 12 months from the date of this Base Prospectus to be admitted to trading on the Luxembourg Stock Exchange’s regulated market and to be listed on the official list of the Luxembourg Stock Exchange. Notes may be listed or admitted to trading, as the case may be, on other or further stock exchanges or markets agreed between the Issuer and the relevant Dealers in relation to a Series of Notes. In particular, Notes may be listed on one of the Oslo Stock Exchange’s regulated markets, as more particularly described on the cover page of this Base Prospectus. Exempt Notes may also be issued which are neither listed nor admitted to trading on any market. The applicable Final Terms will state whether or not the relevant Notes are to be Bearer Notes, Registered Notes or VPS Notes and whether such Notes are to be listed and/or admitted to trading and, if so, on which stock exchanges and/or markets.

Ratings: Unsubordinated Notes issued under the Programme are expected to be rated A1 by Moody’s and A- by Fitch. Subordinated Notes issued under the Programme are expected to be rated Baa2 by Moody’s and (if rated) shall be rated by Fitch upon issuance, such rating to be disclosed in the Final Terms or Pricing Supplement, as applicable. Series of Notes

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issued under the Programme may be rated or unrated. Where a Series of Notes is rated, such rating will be disclosed in the applicable Final Terms and will not necessarily be the same as the ratings assigned to the Notes already issued. A security rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, reduction or withdrawal at any time by the assigning rating agency.

Governing Law: The Ordinary Notes and any non-contractual obligations arising out of or in connection with the Ordinary Notes will be governed by and shall be construed in accordance with English law, save as to Condition 2(b) of the Ordinary Note Conditions which will be governed by and construed in accordance with Norwegian law. VPS Notes and any non-contractual obligations arising out of or in connection with the VPS Notes will be governed by and shall be construed in accordance with English law, save as to Conditions 2(b), 8, 9, 10, 11, 12 and 13 of the VPS Conditions which will be governed by and construed in accordance with Norwegian law. VPS Notes must comply with the Norwegian Act on Registration of Financial Instruments of 5 July 2002 No. 64 (as amended from time to time) and the holders of VPS Notes will be entitled to the rights and subject to the obligations and liabilities which arise under this Act and any related regulations and liabilities.

Clearing Systems: Euroclear, Clearstream, Luxembourg Verdipapirsentralen ASA (“VPS”) and/or any other clearing system as may be specified in the relevant Final Terms, other than in relation to VPS Notes, which are cleared through the VPS.

Delivery: The Notes may be settled on a delivery against payment basis or a delivery free of payment basis, as specified in the applicable Final Terms.

Selling Restrictions: There are restrictions on the offer, sale and transfer of the Notes in the United States, the EEA (including the United Kingdom, the Republic of Italy and Norway) and Japan and such other restrictions as may be required in connection with the offering and sale of a particular Tranche of Notes; see “Subscription and Sale and Transfer and Selling Restrictions”.

United States Selling Restrictions: The Notes have not been and will not be registered under the Securities Act and the Notes may include Bearer Notes that are subject to U.S. tax law requirements. Subject to certain exceptions, the Notes may not be offered, sold or, in the case of Bearer Notes, delivered within the United States. Bearer Notes will be issued in compliance with U.S. Treasury Regulations §1.163-5(c)(2)(i)(D) (or any successor U.S. Treasury regulations section, including without limitation, successor

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regulations issued in accordance with IRS Notice 2012-20 or otherwise in connection with the United States Hiring Incentives to Restore Employment Act of 2010) (“TEFRA D”) or 1.163-5(c)(2)(i)(C) (or any successor U.S. Treasury regulations section, including without limitation, successor regulations issued in accordance with IRS Notice 2012-20 or otherwise in connection with the United States Hiring Incentives to Restore Employment Act of 2010) (“TEFRA C”), unless the Bearer Notes are issued in circumstances in which the Bearer Notes will not constitute “registration required obligations” for U.S. federal income tax purposes, which circumstances will be referred to in the relevant Final Terms as a transaction to which TEFRA is not applicable.

Risk Factors: There are certain factors that may affect the Issuer’s ability to fulfil its obligations under Notes issued under the Programme. These are set out under “Risk Factors” above.

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DOCUMENTS INCORPORATED BY REFERENCE AND SUPPLEMENTS TO THE BASE PROSPECTUS

The following documents have been filed with the CSSF and shall be incorporated by reference in, and form part of, this Base Prospectus:

(a) the audited consolidated financial statements of the Issuer as of and for the financial year ended 31 December 2015 together with the independent auditors’ report thereon (an English translation is available on the website of the Issuer at https://www.sparebank1.no/en/sr-bank/about-us/investor/financial-info/reports.html) set out on the following pages of the Issuer’s 2015 annual report (in a document named “Annual Report 2015”):

Income Statement p. 48

Balance Sheet p. 49

Equity Statement p. 50

Cash Flow Statement p. 51

Notes p. 52 – 113 (inclusive)

Auditors’ Report p. 114 – 115 (inclusive)

(b) the audited consolidated financial statements of the Issuer as of and for the financial year ended 31 December 2016 together with the independent auditors’ report thereon (an English translation is available on the website of the Issuer at https://www.sparebank1.no/en/sr-bank/about-us/investor/financial-info/reports.html) set out on the following pages of the Issuer’s 2016 annual report (in a document named “Annual Report 2016”):


Balance Sheet p. 59




Auditors’ Report p. 126 – 131 (inclusive); and

(c) the interim unaudited consolidated financial statements of the Issuer as of and for the three-month period ended 31 March 2017 (an English translation is available on the website of the Issuer at https://www.sparebank1.no/en/sr-bank/about-us/investor/financial-info/reports.html) set out on the following pages of the Issuer’s interim unaudited first quarter report (in a document named “First Quarter 2017”):


Balance Sheet p. 16




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Only the information set out in the cross-reference lists in (a) – (c) above is being incorporated by reference into this Base Prospectus. Any other information that is not included in the cross-reference lists above is considered to be additional information to be disclosed to investors rather than information required by the relevant annexes of the Prospectus Regulation and such additional information shall not be incorporated by reference into this Base Prospectus. Any such non-incorporated parts of a document referred to herein are either not relevant for an investor or are otherwise covered elsewhere in this Base Prospectus.

Copies of the documents incorporated by reference in this Base Prospectus may be obtained (without charge) from the registered office of the Issuer and the specified offices of the Paying Agents for the time being in London and in Luxembourg. Documents incorporated by reference in this Base Prospectus will also be published on the website of the Luxembourg Stock Exchange (www.bourse.lu).

Following the publication of this Base Prospectus a supplement may be prepared by the Issuer and approved by the CSSF in accordance with Article 16 of the Prospectus Directive. Statements contained in any such supplement (or contained in any document incorporated by reference therein) shall, to the extent applicable (whether expressly, by implication or otherwise), be deemed to modify or supersede statements contained in this Base Prospectus. Any statement so modified or superseded shall not, except as so modified or superseded, constitute a part of this Base Prospectus.

The Issuer will, in the event of any significant new factor, material mistake or inaccuracy relating to information included in this Base Prospectus which is capable of affecting the assessment of any Notes, prepare a supplement to this Base Prospectus or publish a new prospectus for use in connection with any subsequent issue of Notes.

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USE OF PROCEEDS

The net proceeds from each issue of Notes will be applied by the Issuer for its general corporate purposes.

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DESCRIPTION OF THE ISSUER’S BUSINESS

Overview On 1 October 1976, 22 savings banks in Rogaland merged to form Norway's first regional savings bank, Sparebanken Rogaland. At that time, this was the most comprehensive merger that had been carried out among Norwegian savings banks. The regional savings bank grew through their active participation in Rogaland's social and business development, which has been their guiding concept ever since 1839, when the first of the merged savings banks was founded in Egersund. The intention of the founders of the savings banks in the rural districts was to contribute to positive community development by channelling locally created value back into local communities.

In 1996, the bank was a co-founder of SpareBank 1 Alliance, which is a banking and product alliance. The SR-Bank Group’s participation in the SpareBank 1 Alliance links it to independent banks with local roots. In March 2007, the bank formally changed its name from Sparebanken Rogaland to SpareBank 1 SR-Bank. On 21 June 2011, the Ministry of Finance granted SpareBank 1 SR-Bank permission to convert from a savings bank to a limited liability company (limited liability savings bank) and to establish a savings bank foundation on specific terms and conditions. The conversion and establishment of Sparebankstiftelsen SR-Bank was completed with effect from 1 January 2012. The company's legal name was simultaneously changed to SpareBank 1 SR-Bank ASA. SpareBank 1 SR-Bank ASA is registered with the Norwegian Company Registry with organisation number 937895321. The address of the registered office is P.O. Box 250, 4066 Stavanger (tel +47 915 02002).

The SR-Bank Group had 1,234 employees as of 31 December 2016. The SR-Bank Group comprises the parent bank, SpareBank 1 SR-Bank ASA, and the subsidiaries EiendomsMegler 1 SR-Eiendom AS, SpareBank 1 SR Forvaltning AS, SpareBank 1 Regnskapshuset SR AS and SR-Boligkreditt AS. The Issuer is not directly or indirectly owned or controlled by any one shareholder. The Issuer’s largest shareholder is a foundation, Sparebankstiftelsen SR-Bank, which owns 28.32 per cent. of the shares.

Business Operations The SR-Bank Group's market areas are Rogaland, the Agder counties and Hordaland. SpareBank 1 SR-Bank ASA had 36 branches and total assets of NOK 193.4 billion (on group level) as of 31 December 2016. Its registered head office is in Stavanger. The bank’s customer-orientated activities are organised into three divisions: the retail market, corporate market and capital market, respectively. SpareBank 1 SR-Bank ASA provides products and services in the fields of financing, investments and payment services. The SR-Bank Group also provides pension, life and P&C (property and casualty) insurance products through SpareBank 1 Gruppen AS (19.5 per cent. owned by SpareBank1 SR-Bank ASA).

SpareBank 1 SR-Bank ASA’s primary market area is the southern and western Norway with 312,000 retail customers and a market share of 20 per cent. at year-end 2016. In addition to retail customers, the retail market division also serves 5,900 small business and agricultural customers.

In 2016, the corporate market division was responsible for serving 14,500 corporate customers via a broad distribution network. The division has five regional business units and two specialist units: one for the energy and maritime sectors and one for the public sector.

SpareBank 1 SR-Bank Markets is one of the region’s leading securities firms. Its activities include own account and customer trading in interest rate instruments, foreign exchange and equities, providing advice and facilitating debt and equity funding, as well as administrative securities services.

SpareBank 1 SR-Bank ASA has also sold NOK 24.7 billion worth of mortgages to its part-owned mortgage companies SpareBank 1 Boligkreditt AS and SpareBank 1 Næringskreditt AS as of 31 December 2016.

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Business Strategy SpareBank 1 SR-Bank ASA aims to be the most attractive supplier of financial services in the west and south of Norway. The bank’s strategy is based on good customer experiences, professionalism, local roots and decision making, financial strength, profitability and market trust.

SR-Bank Group's Performance SpareBank 1 SR-Bank recorded good progress in all of the SR-Bank Group’s business areas in 2016. The banking market remained highly competitive in 2016, and the competition within the financing of home mortgages was more intense than for corporate loans. The home mortgage market was affected by a combination of greater competition, slightly lower growth in the Norwegian economy, and weak to negative price growth for homes in the bank’s main market in Rogaland. Net lending to corporate customers was slightly negative for the year 2016, which was the result of a market characterised by continued uncertainty and some reluctance to invest. The margins for loans to retail customers were reduced in 2016, while the margins for loans to corporate customers increased in the same period. Deposit margins increased within both retail and the corporate market due to focus within the organisation on strengthening income from deposits. Total deposits were reduced by 3.9 per cent. in 2016 due to the repricing of some deposits intended for institutional customers. Overall, earnings from net interest income were better in 2016 than in 2015.

Net commissions and other operating income decreased from 2015 to 2016. The reduction was primarily attributable to lower commissions from SpareBank 1 Boligkreditt AS due to a reduction of home mortgages sold to the covered bond company in 2016. Net commissions from sales of insurance products, savings and investment products, and income from arrangement/customer fees were unchanged or slightly higher than in 2015.

The equity and interest rate markets were again volatile in 2016, but greater optimism, especially in the second half of the year, resulted in rising prices on the Oslo Stock Exchange and a positive development in credit spreads in general. Capital gains from securities totalled NOK 53 million for the full year. This was due to a combination of capital losses of NOK 156 million in the interest portfolio, which were counteracted by positive effects totalling NOK 158 million from hedging instruments, as well as capital gains of NOK 51 million from the portfolio of shares and equity certificates.

Individual impairment losses on loans were NOK 778 million in 2016, compared with NOK 420 million in 2015, while collective impairment losses increased by NOK 158 million in 2016 compared with NOK 140 million in 2015. The increase in collective impairment losses was due to the continued uncertainty associated with low oil prices, as well as the prevailing market conditions and expected development of the level of activity in oil-related business. Impairments as a percentage of gross loans, including loans from the mortgage companies, amounted to 0.4 per cent. The board regards the quality of the loan portfolio and risk management as good.

The SR-Bank Group’s subsidiaries and its strategic ownership in the SpareBank 1 Alliance’s product companies make a significant contribution to SpareBank 1 SR-Bank’s earnings. As far as the subsidiaries are concerned, EiendomsMegler 1 SR-Eiendom AS enjoyed a good level of activity despite the weak start in 2016. The levels of activity in the bank’s other subsidiaries remained high during 2016.

Financial Overview The SR-Bank Group achieved a pre-tax profit of NOK 2,158 million in 2016. The net profit for the year amounted to NOK 1,755 million, compared with NOK 1,746 million in 2015.

Solid efforts by employees, good credit work and close relationships with customers have been important drivers behind a good result in a demanding year. The bank’s market position in Southern and Western

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Norway was further strengthened by a net increase of 2,500 retail customers aged 13 and above and more than 700 new corporate customers in 2016.

Lending, including loans sold to SpareBank 1 Boligkreditt AS and SpareBank 1 Næringskreditt AS, decreased by 0.9 per cent. in 2016. Deposits from customers decreased by 3.9 per cent. in 2016 compared to a growth of 9.8 per cent. in 2015. The deposit coverage ratio, measured as deposits as a percentage of total loans, was 54.5 per cent. at year-end, compared with 57.6 per cent. in 2015.

Net interest income rose to NOK 2,871 million in 2016, compared with NOK 2,593 million in 2015. Net interest income as a percentage of average total assets increased to 1.48 per cent. in 2016, from 1.42 per cent. in 2015. The increase was the result of improved risk pricing for large parts of the corporate market portfolio and an increase in the SR-Bank Group’s deposit margins due to repricing.

Net commissions and other operating income totalled NOK 1,443 million in 2016, down from NOK 1,532 million in 2015. The reduction is largely attributable to lower commissions from SpareBank 1 Boligkreditt AS due to the SR-Bank Group buying back a total of NOK 4 billion in loans from the mortgage company in 2016. Other commissions increased by 1.6 per cent. from year-end 2015. Net income on financial investments amounted to NOK 654 million in 2016, compared with NOK 304 million in 2015. This includes the profit shares from SpareBank 1 Gruppen AS and other associated companies. The profit from the sale of the shares in Visa Europe Ltd to Visa Inc. amounted to NOK 94 million in 2016.

The SR-Bank Group’s operating costs for the year amounted to NOK 2,032 million, compared to NOK 1,863 million in 2015, an increase of NOK 169 million (9.1 per cent.). Personnel costs rose by NOK 221 million (23.4 per cent.) to NOK 1,166 million. This increase must be viewed in the context of the personnel costs in 2015 being reduced by NOK 226 million due to a one-off reduction in costs (curtailment) in connection with the switch to defined contribution pensions for all employees. Other operating costs were reduced by NOK 52 million (-5.7 per cent.) to NOK 866 million.

Impairment losses on loans totalled NOK 778 million, compared with NOK 420 million in 2015. The higher impairment losses on loans in 2016 were largely due to impairment losses linked to individual commitments within oil-related activities, and collective impairment losses that were NOK 158 million higher. The increase in collective impairment losses was due to the continued uncertainty associated with low oil prices, as well as the prevailing market conditions and future development of economic activity in Norway in general and in Southern and Western Norway in particular.

SpareBank 1 SR-Bank ASA paid a dividend in April 2017 of NOK 575 million out of a distributable profit of NOK 2,032 million for the year 2016. The dividend corresponds to NOK 2.25 per share. NOK 1,457 million was allocated to other equity and enhancing the SR-Bank Group’s financial strength.

The common equity tier 1 capital ratio increased from 13.3 per cent. at the start of the year to 14.7 per cent. at year-end 2016. The tier 1 capital ratio (including hybrid tier 1 capital) increased in the same period to 15.6 per cent. from 14.2 per cent. in 2015. At year-end 2016, SpareBank 1 SR-Bank was in a solid financial position and well-equipped to meet the stricter regulatory capital requirements for financial institutions which are to be implemented over the coming years. The board has set a target for the common equity tier 1 capital ratio of 15.0 per cent. by year-end 2017.

Risk and Capital Management The core business of SpareBank 1 SR-Bank ASA is to achieve value creation through taking conscious and acceptable risk. The SR-Bank Group, therefore, invests significant resources in maintaining and developing risk management systems and processes that are in line with leading international practice. The board of SpareBank 1 SR-Bank has established its own risk committee.

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The risk and capital management should underpin the SR-Bank Group’s strategic development and goal attainment, while ensuring financial stability and prudent asset management. This shall be achieved through:

• a good risk culture characterised by a high awareness of risk management and the SR-Bank Group’s core values

• a good understanding of which risks drive earnings

• pricing activities and products in line with their underlying risk, insofar as this is possible

• having adequate financial strength based on a chosen risk profile and simultaneously striving for optimal capital allocation to the various business areas

• utilising diversification effects

• preventing single events seriously damaging the SR-Bank Group’s financial position.

The SR-Bank Group’s risk is quantified, inter alia, by computing expected losses and risk-adjusted capital for unexpected losses. Expected losses describe the amount one statistically expects to lose during a 12-month period, while risk-adjusted capital describes how much capital the SR-Bank Group believes it needs to cover the actual risk to which the SR-Bank Group is exposed. The most important risks the SR-Bank Group is exposed to are credit risk, market risk, liquidity risk, operational risk and ownership risk. See also “Risk Factors” above.

Major Subsidiaries

Eiendomsmegler 1 SR-Eiendom AS EiendomsMegler 1 SR-Eiendom AS is the largest company in the nationwide EiendomsMegler 1 chain. Its activities include residential and commercial real estate broker services. In 2016, the company sold 6,042 properties via its estate agencies in Rogaland, Hordaland and the Agder counties.

SR-Forvaltning AS SR-Forvaltning AS is licensed to provide active management and securities management services. The latter were launched in May 2013 and consist of three funds: SR-Utbytte, SR-Kombinasjon and SR-Rente. The company also manages portfolios for SpareBank 1 SR-Bank’s pension fund and for external customers on the basis of discretionary mandates. The external customer base comprises pension funds, public and private enterprises and affluent individuals. Its total assets under management were NOK 9.5 billion in 2016, compared with NOK 9.4 billion in 2015.

SpareBank 1 Regnskapshuset SR AS SpareBank 1 Regnskapshuset SR AS was established in the first quarter of 2015 in connection with the purchase of the Rogaland’s branch of SpareBank 1 Regnskapshuset Østlandet AS. The company provides financial management and accounting services. At the start of 2017, the company had six offices, four in Rogaland and two in Bergen, which in total serve more than 2,000 customers. At the end of 2016, the company had 79 employees.

SR-Boligkreditt AS SR-Boligkreditt AS is a wholly owned subsidiary and was established in the second quarter of 2015. The purpose of the company is to purchase home mortgages from SpareBank 1 SR-Bank and it funds this by issuing covered bonds. SR-Boligkreditt AS enables SpareBank 1 SR-Bank to diversify and optimise its funding. The company is rated Aaa by Moody’s. At year-end 2016, SR-Boligkreditt AS’s total assets were NOK 30.1 billion.

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The SpareBank 1 Alliance SpareBank 1 SR-Bank ASA is part of the SpareBank 1 Alliance. The members of the alliance operate and develop product companies through the jointly owned holding company SpareBank 1 Gruppen AS.

The paramount objective of the SpareBank 1 Alliance is to assure the independence and regional identity of the individual banks that make up the SpareBank 1 Alliance through strong competitiveness, profitability and financial soundness. The parties to the SpareBank 1 Alliance agreement are SpareBank 1 SMN, SpareBank 1 Nord-Norge, SpareBank 1 SR-Bank ASA, SpareBank 1 Østlandet and Samarbeidende Sparebanker AS. The current set of contract terms pertaining to the SpareBank 1 Alliance and the SpareBank 1 banks’ rights and obligations have been approved by the FSAN.

The SpareBank 1 Alliance Structure SpareBank 1 Gruppen AS is owned by SpareBank 1 SR-Bank ASA (19.5 per cent.), SpareBank 1 SMN (19.5 per cent.), SpareBank 1 Nord-Norge (19.5 per cent.), SpareBank 1 Østlandet (12.4 per cent), Samarbeidende Sparebanker AS (19.5 per cent.), and the Norwegian Confederation of Trade Unions (“LO”) and affiliated trade unions (9.6 per cent.).

SpareBank 1 Gruppen AS owns 100 per cent. of SpareBank 1 Forsikring, ODIN Forvaltning, SpareBank 1 Skadeforsikring, SpareBank 1 Gruppen Finans and Conecto.

SpareBank 1 Gruppen AS provides the administrative superstructure for the SpareBank 1 Alliance through SpareBank 1 Banksamarbeidet DA (owned by the regional banks, Samarbeidende Sparebanker and SpareBank 1 Gruppen AS). SpareBank 1 Gruppen AS and its subsidiaries have 1,200 employees.

The SpareBank 1 Alliance was established to develop and deliver joint IT / mobile solutions, branding and marketing concepts, business models, products and services, expertise, analysis, processes, best-practice solutions and procurement. The SpareBank 1 Alliance has also developed two competence centres for payment transmission services (based in Trondheim) and credit management (based in Stavanger).

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Management and the Board of Directors SpareBank 1 SR-Bank ASA’s management and control bodies have all been established with respect to Norwegian legislation. The figure below shows an overview of SpareBank 1 SR-Bank ASA’s management and control bodies:

Through the general meeting, the shareholders exercise the highest level of authority at SpareBank 1 SR-Bank ASA. The general meeting elects the members of both the board of directors and the nomination committee, as well as adopting decisions on remuneration for the members of these two bodies.

The Board of Directors The board of directors of SpareBank 1 SR-Bank ASA consists of eight members, including two members who are elected by the employees.

The board of directors is responsible for the administration of SpareBank 1 SR-Bank ASA’s business. This includes making decisions on individual credit cases. The board of directors must ensure a satisfactory organisation of SpareBank 1 SR-Bank ASA’s operations, including ensuring that accounting and asset management are subjected to proper scrutiny.

Name: Board position: Business address:

Dag Mejdell Board Chairman Silurveien 18A, 0380 Oslo

Birthe C. Lepsøe Board Member Werners Holmvei 11, 5232 Paradis

Therese Log Bergjord Board Member Nygårdsveien 7, 4044 Hafrsfjord

External audit

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Jan Skogseth Board Member Nikkelveien 22, 4313 Sandnes

Tor Dahle Board Member Sparebankstiftelsen SR-Bank, Domkirkeplassen 2, N-4000 Stavanger

Kate Henriksen Board Member Miles AS, O. J. Brochs gate 16a 5006 Bergen

Sally Lund-Andersen Employee Representative SpareBank 1 SR-Bank ASA, Bjergsted Terrasse 1, N-4009 Stavanger

Kristian Kristensen Employee Representative SpareBank 1 SR-Bank ASA, Bjergsted Terrasse 1, N-4009 Stavanger

Dag Mejdell, Chairman of the Board Dag Mejdell (1957) has long experience from various management positions in Norwegian industry. He was last CEO in Posten Norge AS from 2006 to 2016. From 2000 until 2005 he was CEO in Dyno Nobel ASA and before that he worked 19 years in Dyno ASA, the last three of them as CEO. Meidell holds a 4-year degree in Economics and Business Administration from the Norwegian School of Economics in Bergen.

Number of shares in SpareBank 1 SR-Bank ASA (including any shares owned by closely related parties and/or companies on whose behalf he has been chosen): 25,000 as at 27 April 2017.

Chairman of the Board of SpareBank 1 SR-Bank ASA since 9 June 2016.

Board appointments:

• Chairman of the board: Norwegian Hydro, NSB AS and International Post Corporation CV

• Deputy Chairman: SAS AB

Kate Henriksen, Board Member Kate Henriksen (1960) is COO at Miles Bergen. Her previous positions include Executive Vice President, Retail Market at Sparebanken Vest, marketing director / general manager at Ementor, and various managerial positions at DnB.

Henriksen has a degree in business administration from the Norwegian School of Economics and Business Administration (NHH). She has also studied information technology and automation at Bergen College of Engineering, branding, and various management development programmes.

Number of shares in SpareBank 1 SR-Bank ASA (including any shares owned by closely related parties and/or companies on whose behalf she has been chosen): 0.

Member of the Board of SpareBank 1 SR-Bank ASA since 4 June 2015.

Tor Dahle, Board Member Tor Dahle (1952) is General Manager in Sparebankstiftelsen SR-Bank. Dahle holds a master's degree in economics. His previous experience includes management positions in SpareBank 1 SR-Bank ASA, as CFO and latest as Managing Director in SR-Investering AS from 2006 until 2011.

Number of shares in SpareBank 1 SR-Bank ASA (including any shares owned by closely related parties and/or companies on whose behalf he has been chosen): 72,456,358 (37,053 privately owned and 72,419,305 on behalf of Sparebankstiftelsen SR-Bank) as at 27 April 2017

Board member since 6 June 2013

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Board appointments:

• Chairman: EM Software Partners

• Board member: Sparebankforeningen i Norge

• Deputy member: Finans Norge

Birthe Cecilie Lepsøe, Board Member Birthe Cecilie Lepsøe (1971) is partner in Vest Corporate Advisors in addition to board work. She has experience from Grieg Shipping Group as Finance Manager from 2006 until 2012, and from DNB's shipping division in Bergen and London from 1997 until 2006, most recently as Vice President.

Lepsøe holds an MBA from BI, and has participated in NHH, the Norwegian School of Economics authorised financial analyst studies.


First elected board member in SpareBank 1 SR-Bank from 2008-2011, until the conversion to ASA.

Re-elected as board member since 1 January 2012.

Board appointments:

• Board Member: Smedvig Eiendom AS, Smedvig Capital AS, Smedvig AS, Inventura Group AS

• Deputy member: Askøy Kommunale Eiendomsselskap AS

Therese Log Bergjord, Board Member Therese Log Bergjord (1965) is Nordic Managing Director of Compass Group. Former Managing Director of ESS Support Services AS, Norwegian and Global Sales Director in Skretting, and CFO and Commercial Director in Pan Fish ASA. She graduated at the University of Stavanger - finance/economics, marketing and entrepreneurship.


Member of the Board of SpareBank 1 SR-Bank ASA since 20 April 2017.

Board appointments:

• Chair: Ess Mobile Offshore Units AS, Ess Support Services AS, Eurest AS, Gress Gruppen AS, Compass Holding Norge AS

• Vice President of Confederation of Norwegian Enterprises (NHO)

Jan Skogseth, Board Member Jan Skogseth (1955) was President and CEO of Aibel AS from 2008 until 31 December 2016. He has 35 years of national and international experience from oil, gas, and renewable industries from working in oil companies and supplier industry.

Graduate of South Dakota School of Mines & Technology, Master of Science, Mechanical Engineering.

Number of shares in SpareBank 1 SR-Bank ASA (including any shares owned by closely related parties and/or companies on whose behalf he has been chosen): 0.

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Member of the Board of SpareBank 1 SR-Bank ASA since 20 April 2017.

Board appointments:

• Chair of the board of Woodco AS

• Board member of Scatec Solar ASA

Sally Lund-Andersen, employee-elected Board Member Sally Lund-Andersen (1961) is a group employee representative at SpareBank 1 SR-Bank ASA.

Number of shares in SpareBank 1 SR-Bank ASA (including any shares owned by closely related parties and/or companies on whose behalf she has been chosen): 941 as at 27 April 2017.

Board member since 1 January 2012.

Board appointments:

• Deputy Board Member: SpareBank 1 Gruppen AS

• Chair: Finance Sector Union of Norway, Rogaland division

Kristian Kristensen, employee-elected Board Member Kristian Kristensen (1982) is deputy in Finansforbundet SpareBank 1 SR-Bank. He holds a Bachelor in Market Communication from BI Norwegian Business School.

Number of shares in SpareBank 1 SR-Bank ASA (including any shares owned by closely related parties and/or companies on whose behalf he has been chosen): 3,020 as at 27 April 2017.

Employee-elected member of the Board of SpareBank 1 SR-Bank ASA since 9 June 2016.

Board appointments:

• Board member: Finance Sector Union of Norway

• Deputy member: Finance Sector Union of Norway, Rogaland division

As far as is known to SpareBank 1 SR-Bank ASA, no potential conflicts of interest exist between any duties to SpareBank 1 SR-Bank ASA of the board of directors and their private interests or other duties in respect of their management roles.

Executive Management

Arne Austreid, Chief Executive Officer Arne Austreid has been CEO of SpareBank 1 SR-Bank since 1 January 2011. He is a petroleum engineer and an MBA (Master of Business Administration) from Aberdeen University, Scotland (1992 - 1995). He has previously worked for Transocean ASA and Prosafe SE, offshore, onshore and abroad. His last management position was President and CEO, Prosafe SE.

Number of shares in SpareBank 1 SR-Bank ASA (including any shares owned by closely related parties): 94,156 as at 27 April 2017.

Board appointments:

Board member: SpareBank 1 Gruppen AS and SpareBank 1 Banksamarbeidet DA

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Frode Bø, Executive Vice President, Risk Management and Compliance Frode Bø is a Bachelor of Management from BI Norwegian Business School (1992) and also completed a master's degree programme in operational auditing and risk management at BI Norwegian Business School (2003). He has experience from Mobil Exploration Ltd., as department manager of finance/budget at Kværner Rosenberg and finance/administration manager at Randaberg Sveiseindustri AS. He has been employed at the University of Stavanger, as lecturer at the faculty of industrial economics, risk management and planning until 2016. Frode Bø has been employed by SpareBank 1 SR-Bank since 2001.


Inge Reinertsen, Chief Financial Officer Reinertsen has a degree in Business Administration from the Norwegian School of Economics in Bergen (1991-1995). Experience from Arthur Andersen and Arthur Andersen Business Consulting as auditor and consultant (1995-2001). Employed by the SR-Bank Group since 2001. Previous positions include regional bank manager for the Haugesund region (2001-2007) and managing director of SpareBank 1 SR-Finans (2007-2010).


Board appointments:

Chairman of the Board: SR-Boligkreditt AS, SR-Investering AS and SR-Forvaltning AS

Deputy Chairman: SpareBank 1 Boligkreditt

Board Member: SpareBank 1 Gruppen Finans AS, SpareBank 1 SR-Bank's pension fund

Conecto Deputy: SpareBank 1 Gruppen AS and SpareBank 1 Banksamarbeidet DA

Glenn Sæther, Executive Vice President, Business Support Glenn Sæther was educated in economics and business administration at BI Norwegian Business School. He has experience as chief accountant in the municipality of Sandnes, consultant and marketing executive at Webcenter Unique ASA and senior consultant at Helse Vest RHF. He has been employed by SpareBank 1 SR-Bank since 2005.


Board appointments:

Chairman of the Board: Finansparken Bjergsted AS Board

Member: SpareBank 1 Skadeforsikring AS

Deputy: SR-Forvaltning AS

Jan Friestad, Executive Vice President, Retail Market Jan Friestad has a degree in economics and business administration from Stavanger University College (1988) and is also Master of Management in various market strategy and management programmes at BI Norwegian Business School. He has been employed by SpareBank 1 SR-Bank since 1988. Among other positions, he has been corporate consultant, local bank manager, regional bank manager in the corporate market, adviser to the CEO and director for business development in the retail market.

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Board appointments:

Chairman of the Board: EiendomsMegler 1 SR-Eiendom AS

Board Member: SpareBank 1 Mobilbetaling AS

Inglen Haugland, Executive Vice President, Organisation and HR Inglen Haugland graduated in economics/administration from Stavanger University College (1996). She also holds a Masters in Management from the Norwegian Business School (BI) (2009) and a MBA from NHH (2015-2016). She has worked in various positions in SpareBank 1 SR-Bank since 1983. Haugland has been a member of the retail market division's management team since 1999. She has been responsible for various units and areas, most recently as regional director of Mid-Rogaland, including the bank's customer service centre.


Board member: SpareBank 1 SR-Bank’s pension fund and Stiftelsen Jærmuseet

Deputy: BN Bank ASA

Thor-Christian Haugland, Executive Vice President, Communications Thor-Christian Haugland was educated at Stavanger University College, the University of Salford and BI Norwegian Business School in economics, communications and management. He was previously sales and marketing manager at Radisson SAS in Stavanger and general manager of Brødrene Pedersen AS. He has over 20 years' experience in various positions at SpareBank 1 SR-Bank. Previous positions include regional manager in Stavanger for the private customer market, corporate consultant, press spokesman and market consultant.


Board appointments:

Board member: Odin Forvaltning AS

Tore Medhus, Executive Vice President, Corporate Market Tore Medhus is Master of Business and Marketing from Oslo Business School/BI (1989). His experience includes marketing manager and deputy head of Elcon Finans and Forenede Credit Finans and Key Account Manager at Telenor. Medhus has been employed by SpareBank 1 SR-Bank since 1994.


Board appointments:

Chairman of the Board: SpareBank 1 SR-Finans and SpareBank 1 Regnskapshuset SR AS

Deputy Chairman: BN Bank ASA

The business address for each member of the SR-Bank Group Executive Management is SpareBank 1 SR-Bank ASA, Bjergsted Terrasse 1, N-4009 Stavanger, Norway.

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As far as is known to SpareBank 1 SR-Bank ASA, no potential conflicts of interest exist between any duties to SpareBank 1 SR-Bank ASA of the SR-Bank Group executive management and their private interests or other duties in respect of their management roles.

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FORM OF THE NOTES

The Notes of each Series will be in either bearer form, with or without interest coupons and/or talons attached, or registered form, without interest coupons or talons attached, or in the case of VPS Notes, uncertificated book entry form.

Bearer Notes and Registered Notes will be issued outside the United States in reliance on Regulation S under the Securities Act (“Regulation S”).

Bearer Notes

Each Tranche of Bearer Notes will be initially issued in the form of a temporary global note without interest coupons or talons attached (a “Temporary Global Note”) which will:

(i) if the Bearer Global Notes are intended to be issued in new global note (“NGN”) form, as stated in the applicable Final Terms (the “applicable Final Terms”), be delivered on or prior to the issue date of the relevant Tranche to a common safekeeper (the “Common Safekeeper”) for Euroclear Bank SA/NV (“Euroclear”) and Clearstream Banking, société anonyme (“Clearstream, Luxembourg”); and

(ii) if the Bearer Global Notes are not intended to be issued in NGN form, as stated in the applicable Final Terms, be delivered on or prior to the issue date of the relevant Tranche to a common depositary (the “Common Depositary”) for Euroclear and Clearstream, Luxembourg and/or any other agreed clearing system.

Bearer Notes will only be delivered outside the United States and its possessions.

If the applicable Final Terms indicates that the Bearer Global Note is an NGN, the nominal amount of the Notes represented by such Bearer Global Note will be the aggregate from time to time entered in the records of both Euroclear and Clearstream, Luxembourg. The records of Euroclear and Clearstream, Luxembourg (which expression in such Bearer Global Note means the records that each of Euroclear and Clearstream, Luxembourg holds for its customers which reflect the amount of each such customer’s interest in the Notes) will be conclusive evidence of the nominal amount of Notes represented by such Bearer Global Note and, for such purposes, a statement issued by Euroclear and/or Clearstream, Luxembourg, as the case may be, stating that the nominal amount of Notes represented by such Bearer Global Note at any time will be conclusive evidence of the records of Euroclear and/or Clearstream, Luxembourg at that time, as the case may be.

Upon delivery of a Temporary Bearer Global Note, Euroclear and/or Clearstream, Luxembourg and/or such other agreed clearing system will credit purchasers with nominal amounts of Notes of the relevant Tranche equal to the nominal amounts thereof for which they have paid.

Whilst any Bearer Note is represented by a Temporary Global Note, payments of principal, interest (if any) and any other amount payable in respect of the Bearer Notes due prior to the Exchange Date (as defined below) will be made (against presentation of the Temporary Global Note if the Temporary Global Note is not in NGN form) only outside the United States and its possessions to the extent that certification (in a form to be provided) to the effect that the beneficial owners of interests in such Bearer Note are not United States persons or persons who have purchased for resale to any United States person, as required by United States Treasury regulations, has been received by Euroclear and/or Clearstream, Luxembourg and Euroclear and/or Clearstream, Luxembourg, as applicable, has given a like certification (based on the certifications it has received) to the Principal Paying Agent (the “Principal Paying Agent”).

On and after the date (the “Exchange Date”) which is 40 days after a Temporary Global Note is issued, interests in such Temporary Global Note will be exchangeable (free of charge) upon a request as described

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therein for (a) interests in a permanent global note without interest coupons or talons attached (a “Permanent Global Note” and, together with the Temporary Global Notes, the “Bearer Global Notes” and each a “Bearer Global Note”) of the same Series or (b) definitive notes of the same Series with, where applicable, interest coupons and talons attached (as indicated in the applicable Final Terms and subject, in the case of Bearer Definitive Notes, to such notice period as is specified in the applicable Final Terms), in each case against certification of non-U.S. beneficial ownership as described above unless such certification has already been given. The holder of a Temporary Global Note will not be entitled to collect any payment of interest, principal or other amount due on or after the Exchange Date unless, upon due certification, exchange of the Temporary Global Note for an interest in a Permanent Global Note or for Bearer Definitive Notes is improperly withheld or refused.

Payments of principal, interest (if any) or any other amounts on a Permanent Global Note will be made through Euroclear and/or Clearstream, Luxembourg (against presentation or surrender (as the case may be) of the Permanent Global Note if the Permanent Global Note is not intended to be issued in NGN form), without any requirement for certification.

The applicable Final Terms will specify that a Permanent Global Note will be exchangeable (free of charge), in whole but not in part, for Bearer Definitive Notes with, where applicable, receipts, interest coupons and talons attached upon either (i) not less than 60 days’ written notice from Euroclear and/or Clearstream, Luxembourg (acting on the instructions of any holder of an interest in such Permanent Global Note) to the Principal Paying Agent as described therein) or (ii) only upon the occurrence of an Exchange Event.

Exchange Event: means that (i) an Event of Default (as defined in Condition 8 of the Ordinary Note Conditions) has occurred and is continuing, (ii) in the case of Bearer Global Notes and Registered Global Notes registered in the name of a nominee for a common depositary or in the name of a nominee for a common safekeeper, as the case may be, for Euroclear and Clearstream, Luxembourg, the Issuer has been notified that both Euroclear and Clearstream, Luxembourg have been closed for business for a continuous period of 14 days (other than by reason of holiday, statutory or otherwise) or have announced an intention permanently to cease business or have in fact done so and no successor or alternative clearing system is available or (iii) in the case of both Bearer Global Notes and Registered Global Notes, the Issuer has or will become subject to adverse tax consequences which would not be suffered were the Notes represented by the Global Note in definitive form. The Issuer will promptly give notice to Noteholders of each Series in accordance with Condition 13 of the Ordinary Note Conditions if an Exchange Event occurs. In the event of the occurrence of an Exchange Event, Euroclear and/or Clearstream, Luxembourg (acting on the instructions of any holder of an interest in such Permanent Global Note) or the Issuer may give notice to the Principal Paying Agent or Registrar requesting exchange and, in the event of the occurrence of an Exchange Event as described in (iii) above, the Issuer may also give notice to the Principal Paying Agent or Registrar requesting exchange. Any such exchange shall occur not later than 45 days after the date of receipt of the first relevant notice by the Principal Paying Agent or the Registrar (as the case may be).

The exchange upon notice/at any time options should not be expressed to be applicable if the Specified Denomination of the Notes includes language substantially to the following effect: “€100,000 and integral multiples of €1,000 in excess thereof up to and including €199,000”. Furthermore, such Specified Denomination construction is not permitted in relation to any issuance of Notes which is to be represented on issue by a Permanent Global Note exchangeable for Bearer Definitive Notes.

Bearer Global Notes and Bearer Definitive Notes will be issued pursuant to the Agency Agreement.

The following legend will appear on all Permanent Global Notes and Bearer Definitive Notes which have an original maturity of more than one year and on all talons and interest coupons relating to such Permanent Global Notes and Bearer Definitive Notes:

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“ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.”

The sections referred to above generally provide that United States persons (as defined for U.S. federal tax purposes), with certain exceptions, will not be entitled to deduct any loss on Bearer Notes, talons or interest coupons and will not be entitled to capital gains treatment of any gain on any sale, disposition, redemption or payment of principal in respect of such Bearer Notes, talons or interest coupons.

Notes which are represented by a Bearer Global Note will only be transferable in accordance with the rules and procedures for the time being of Euroclear or Clearstream, Luxembourg, as the case may be.

Bearer Notes may not be exchanged for any other form of Note issued by the Issuer and vice versa.

Registered Notes

The Registered Notes of each Tranche will initially be represented by a global note in registered form (a “Registered Global Note”).

Registered Global Notes will be deposited with a common depositary or, where stated in the applicable Final Terms to be held under the NSS, with a common safekeeper, as the case may be, for Euroclear and Clearstream, Luxembourg. Registered Notes will be registered in the name of a common nominee of Euroclear and Clearstream, Luxembourg or, where stated in the applicable Final Terms to be held under the NSS, in the name of a nominee of the common safekeeper. Persons holding beneficial interests in Registered Global Notes will be entitled or required, as the case may be, under the circumstances described below, to receive physical delivery of Definitive Notes in fully registered form.

Payments of principal, interest and any other amount in respect of the Registered Global Notes will, in the absence of provision to the contrary, be made to the person shown on the Register on the relevant Record Date (as defined in Condition 4(d)) of the Ordinary Note Conditions as the registered holder of the Registered Global Notes. None of the Issuer, any Paying Agent or the Registrar will have any responsibility or liability for any aspect of the records relating to or payments or deliveries made on account of beneficial ownership interests in the Registered Global Notes or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

Payments of principal, interest or any other amount in respect of the Registered Notes in definitive form will, in the absence of provision to the contrary, be made to the persons shown on the Register on the relevant Record Date (as defined in Condition 4(d)) of the Ordinary Note Conditions immediately preceding the due date for payment in the manner provided in that Condition.

Interests in a Registered Global Note will be exchangeable (free of charge), in whole but not in part, for Registered Definitive Notes without interest coupons or talons attached only upon the occurrence of an Exchange Event as described in the paragraph relating to Exchange Event above.

Registered Notes are also subject to the restrictions on transfer set forth therein and will bear a legend regarding such restrictions; see “Subscription and Sale and Transfer and Selling Restrictions”.

VPS Notes

Each Tranche of VPS Notes will be issued in uncertificated and dematerialised book entry form. Legal title to the VPS Notes will be evidenced by book entries in the records of the VPS. On the issue of such VPS Notes, the Issuer will send a letter to the VPS Trustee (the “VPS Letter”), which letter will set out the terms of the

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relevant issue of VPS Notes in the form of a Final Terms supplement attached thereto. On delivery of a copy of such VPS Letter including the relevant Final Terms to the VPS and notification to the VPS of the subscribers and their VPS account details by the relevant Dealer, the VPS Agent will credit each subscribing VPS account holder with a nominal amount of VPS Notes equal to the nominal amount thereof for which it has subscribed and paid.

Settlement of sale and purchase transactions in respect of VPS Notes in the VPS will take place two Oslo Business Days after the date of the relevant transaction. Transfers of interests in the relevant VPS Notes will only take place in accordance with the rules and procedures of the VPS from time to time.

VPS Notes may not be exchanged for any other form of Note issued by the Issuer and vice versa.

General

Pursuant to the Agency Agreement (as defined under “Ordinary Note Conditions”), the Principal Paying Agent shall arrange that, where a further Tranche of Notes is issued which is intended to form a single Series with an existing Tranche of Notes, the Notes of such further Tranche shall be assigned a Common Code and ISIN which are different from the Common Code and ISIN assigned to Notes of any other Tranche of the same Series until at least the expiry of the distribution compliance period (as defined in Regulation S) applicable to the Notes of such Tranche.

Any reference herein to Euroclear and/or Clearstream, Luxembourg and/or the VPS shall, whenever the context so permits, be deemed to include a reference to any additional or alternative clearing system specified in the applicable Final Terms.

Where any Note is represented by a Global Note and the Global Note (or any part thereof) has become due and repayable in accordance with the Terms and Conditions of such Notes and payment in full of the amount due has not been made in accordance with the provisions of the Global Note, then from 8.00 p.m. (London time) on such day holders of interests in such Global Note credited to their accounts with Euroclear and/or Clearstream, Luxembourg, as the case may be, will become entitled to proceed directly against the Issuer on the basis of statements of account provided by Euroclear and/or Clearstream, Luxembourg on and subject to the terms of a deed of covenant (the “Deed of Covenant”) dated 7 July 2017, executed by the Issuer.

The Issuer may agree with any Dealer that Notes may be issued in a form not contemplated by the Terms and Conditions of the Notes, in which event, other than where such Notes are Exempt Notes, a new Prospectus will be made available which will describe the effect of the agreement reached in relation to such Notes.

The Issuer will notify the ICSDs and the Paying Agents upon issue whether the Notes are intended, or are not intended, to be held in a manner which would allow Eurosystem eligibility and deposited with one of the ICSDs as common safekeeper (and in the case of registered Notes to be held under the NSS, registered in the name of a nominee of one of the ICSDs acting as common safekeeper). Where the Notes are not intended to be deposited with one of the ICSDs as common safekeeper upon issuance, should the Eurosystem eligibility criteria be amended in the future such that the Notes are then capable of meeting such criteria, the Notes may then be deposited with one of the ICSDs as common safekeeper. Where the Notes are so deposited with one of the ICSDs as common safekeeper (and in the case of registered Notes, registered in the name of a nominee of one of the ICSDs acting as a common safekeeper) upon issuance or otherwise, this does not necessarily mean that the Notes will be recognised as eligible collateral for Eurosystem monetary policy and intra day credit operations by the Eurosystem at issuance or at any time during their life. Such recognition will depend upon the European Central Bank being satisfied that the relevant Eurosystem eligibility criteria have been met.

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APPLICABLE FINAL TERMS

[PROHIBITION OF SALES TO EEA RETAIL INVESTORS – The Notes are not intended, from 1 January 2018, to be offered, sold or otherwise made available to and, with effect from such date, should not be offered, sold or otherwise made available to any retail investor in the European Economic Area (“EEA”). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (“MiFID II”); or (ii) a customer within the meaning of Directive 2002/92/EC (“IMD”), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II. Consequently no key information document required by Regulation (EU) No 1286/2014 (the “PRIIPs Regulation”) for offering or selling the Notes or otherwise making them available to retail investors in the EEA has been prepared and therefore offering or selling the Notes or otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPS Regulation.]

Dated [●]

SpareBank 1 SR-Bank ASA Issue of [Aggregate Nominal Amount of Tranche] [Title of Notes]

under the €10,000,000,000 Euro Medium Term Note Programme

PART A – CONTRACTUAL TERMS

[Terms used herein shall be deemed to be defined as such for the purposes of the [Ordinary Note Conditions] [VPS Conditions] set forth in the prospectus dated [●] [and the supplement[s] to the prospectus dated [●] [and [●]] which [together] constitute[s] a base prospectus (the “Base Prospectus”) for the purposes of the Prospectus Directive (Directive 2003/71/EC) (as amended by Directive 2010/73/EU (the “2010 PD Amending Directive”), the “Prospectus Directive”). This document constitutes the Final Terms of the Notes described herein for the purposes of Article 5.4 of the Prospectus Directive and must be read in conjunction with the Base Prospectus [as so supplemented]. Full information on the Issuer and the offer of the Notes is only available on the basis of the combination of these Final Terms and the Base Prospectus. The Base Prospectus is available for viewing at, and copies may be obtained from, the specified office of each of the Paying Agents. The Base Prospectus and (in the case of Notes listed and admitted to trading on the regulated market of the Luxembourg Stock Exchange) the applicable Final Terms will also be published on the website of the Luxembourg Stock Exchange (www.bourse.lu).]

1 Series Number [●]

2 (i) Tranche Number [●]

(ii) [Series with which Notes will be consolidated and form a single Series:

[●]/Not Applicable]

(iii) [Date on which the Notes will be consolidated and form a single Series with the Series specified above:

The Notes will be consolidated and form a single Series with [provide issue amount/ISIN/maturity date/issue date of earlier Tranches] on [●]/[the Issue Date]/[exchange of the Temporary Global Note for interest in the Permanent Global Note, as referred to in paragraph 24 below [which is expected to occur on or about [date]] [Not Applicable]]

http://www.bourse.lu/

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3 Specified Currency or Currencies: [●]

4 Aggregate Nominal Amount:

(i) Series: [●]

(ii) Tranche: [●]

5 Issue Price: [●] per cent. of the Aggregate Nominal Amount [plus accrued interest from [●] (if applicable)]

6 (a) Specified Denominations: [●] [[€100,000] and integral multiples of [€1,000] in excess thereof up to and including [€199,000] (or equivalent in another currency). No notes in definitive form will be issued with a denomination above [€199,000] (or equivalent in another currency)] [N.B. Notes must have a minimum denomination of €100,000 (or equivalent in another currency)]

(b) Calculation Amount: [●]

7 (i) Issue Date: [●]

(ii) Interest Commencement Date [●]/[Issue Date]/[Not Applicable]

8 Maturity Date: [●]/[Interest Payment Date falling in or nearest to [●]]

9 Interest Basis: [[●] per cent. Fixed Rate] [[Specify particular reference rate] +/- [●] per cent. per annum Floating Rate] [Floating Rate: CMS Linked Interest] [Zero Coupon] [Reset Notes] (see paragraph [15][16][17][18] below)

10 Redemption/Payment Basis [Redemption at par]/[Redemption at [●] per cent. of the nominal amount]

11 Change of Interest Basis: [For the period from (and including) the Interest Commencement Date, up to (but excluding) [date] paragraph [15] [16] applies and for the period from (and including) [date] to (but excluding) the Maturity Date, paragraph [15] [16] applies]/[Not Applicable]

12 Put/Call Options: [Investor Put] [Issuer Call] [Not Applicable] [see paragraph [20][21] below]]

13 Status of the Notes: [Unsubordinated/Subordinated]

14 [Date [Board] approval for issuance of Notes obtained:]

[●] [and [●], respectively]]

PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE

15 Fixed Rate Note Provisions [Applicable/Not Applicable] (if not applicable, delete the remaining subparagraphs of this

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paragraph 15)

(i) Rate(s) of Interest: [●] per cent. per annum [payable in arrear on each Interest Payment Date]

(ii) Interest Payment Date(s): [●] in each year from (and including) [●] up to and including the Maturity Date

(iii) Fixed Coupon Amount(s): [[●] per Calculation Amount/Not Applicable]

(iv) Broken Amount(s): [[●] per Calculation Amount payable on the Interest Payment Date falling [in/on] [●]/Not Applicable]

(v) Day Count Fraction: [30/360]/ [Actual/Actual (ICMA)]

(vi) Determination Date(s): [[●] in each year]/[Not Applicable]

16 Floating Rate Note Provisions [Applicable/Not Applicable] (if not applicable, delete the remaining subparagraphs of this paragraph 16)

(i) Specified Period(s)/Specified Interest Payment Dates:

[●][, subject to adjustment in accordance with the Business Day Convention set out in (ii) below /, not subject to adjustment as the Business Day Convention in (ii) below is specified to be Not Applicable]

(ii) Business Day Convention: [Floating Rate Convention/Following Business Day Convention/Modified Following Business Day Convention/Preceding Business Day Convention/Not Applicable]

(iii) Additional Business Centre(s): [●]

(iv) Manner in which the Rate of Interest and Interest Amount is to be determined:

[Screen Rate Determination/ISDA Determination]

(v) Party responsible for calculating the Rate of Interest and Interest Amount (if not the Principal Paying Agent):

[●]

(vi) Screen Rate Determination: [Applicable/Not Applicable]

– Reference Rate and Relevant Financial Centre:

Reference Rate: [●] month [currency] [LIBOR]/[EURIBOR]/[CIBOR]/[CITA]/[NIBOR]/[EONIA]/[HIBOR]/[SIBOR]/[STIBOR]/[TIBOR]/[CMS Rate] Relevant Financial Centre: [London]/[Brussels]/[Oslo]/[Stockholm] Reference Currency: [●] Designated Maturity: [●] Specified Time: [●] in the Relevant Financial Centre

– Interest Determination Date(s):

[●]

– Relevant Screen Page: [●]

(vii) ISDA Determination: [Applicable/Not Applicable]

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– Floating Rate Option: [●]

– Designated Maturity: [●]

– Reset Date: [●]

(viii) Linear Interpolation: [Not Applicable/Applicable – the Rate of Interest for the [long/short] [first/last] Interest Period shall be calculated using Linear Interpolation (specify for each short or long interest period)]

(ix) Margin(s): [+/-] [●] per cent. per annum

(x) Minimum Rate of Interest: [[●] per cent. per annum][Not Applicable]

(xi) Maximum Rate of Interest: [[●] per cent. per annum][Not Applicable]

(xii) Day Count Fraction: [Actual/Actual [(ISDA)]]/ [Actual/365 (Fixed)]/ [Actual/365 (Sterling)]/ [Actual/360]/ [30/360]/[360/360]/[Bond Basis]/ [30E/360]/[Eurobond Basis] [30E/360 (ISDA)]

17 Reset Note Provisions [Applicable/Not Applicable] (If not applicable, delete the remaining sub-paragraphs of this paragraph)

(i) Initial Rate of Interest: [●] per cent. per annum payable in arrear on each Interest Payment Date

(ii) Initial Mid-Swap Rate: [●] per cent.

(iii) First Reset Margin: [+/-][●] per cent. per annum

(iv) Subsequent Reset Margin: [[+/-][●] per cent. per annum]/[Not Applicable]

(v) Interest Payment Date(s): [●] in each year up to and including the Maturity Date

(vi) Fixed Coupon Amount up to (but excluding) the First Reset Date:

[[●] per Calculation Amount][Not Applicable]

(vii) Broken Amount(s) up to (but excluding) the First Reset Date:

[[●] per Calculation Amount payable on the Interest Payment Date falling on [●]][Not Applicable]

(viii) First Reset Date: [●]

(ix) Second Reset Date: [[●]/[Not Applicable]

(x) Subsequent Reset Date(s): [[●] [and [●]]/[Not Applicable]

(xi) Relevant Screen Page: [●]

(xii) Mid-Swap Rate: [Single Mid-Swap Rate/Mean Mid-Swap Rate]

(xiii) Original Mid-Swap Rate basis: [Annual/Semi-annual/Quarterly/Monthly]

(xiv) Mid-Swap Floating Leg Maturity:

[●]

(xv) Reset Determination Date(s): [●]

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(Specify in relation to each Reset Date)

(xvi) Specified Time: [●]

(xvii) Prior Rate of Interest or Calculation Agent Determination applicable:

[Prior Rate of Interest/Calculation Agent Determination]

(xviii) Day Count Fraction: [Actual/Actual (ICMA)]/[30/360]

(xix) Determination Date(s): [[●] in each year][Not Applicable]

(xx) Calculation Agent: [●][Not Applicable]

18 Zero Coupon Note Provisions [Applicable/Not Applicable] (if not applicable, delete the remaining subparagraphs of this paragraph 18)

(i) Accrual Yield: [●] per cent. per annum

(ii) Reference Price: [●]

(iii) Day Count Fraction in relation to Early Redemption Amounts:

[30/360]/[Actual/360]/[Actual/365]

PROVISIONS RELATING TO REDEMPTION

19 Notice periods for Condition 5(c) (Redemption and Purchase – Redemption for Taxation Reasons):

Minimum period: [●] days Maximum period: [●] days

20 Issuer Call: [Applicable]/[Not Applicable] (if not applicable, delete the remaining subparagraphs of this paragraph 20)

(i) Optional Redemption Date(s): [●]

(ii) Optional Redemption Amount of each Note:

[●] per Note of [●] Specified Denomination

(iii) If redeemable in part:

(a) Minimum Redemption Amount:

[●]

(b) Maximum Redemption Amount:

[●]

(iv) Notice period (if other than as set out in the Conditions):

[●]

21 Investor Put: [Applicable]/[Not Applicable] (if not applicable, delete the remaining subparagraphs of this paragraph 21)

(i) Optional Redemption Date(s): [●]

(ii) Optional Redemption Amount of each Note:

[●] per Note of [●] Specified Denomination

(iii) Notice period (if other than as set out in the Conditions):

[●]

22 Final Redemption Amount of each [●] per Calculation Amount

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Note:

23 Early Redemption Amount of each Note payable on redemption:

[●] per Calculation Amount

24 Redemption Amount upon the occurrence of a Capital Event (Subordinated Notes only):

[[●] per Calculation Amount] / [Not Applicable]

GENERAL PROVISIONS APPLICABLE TO THE NOTES

25 Form of Notes:

(i) Form: [Bearer Notes: [Temporary Global Note exchangeable for a Permanent Global Note which is exchangeable for Bearer Definitive Notes [on 60 days’ notice given at any time/only upon an Exchange Event] [Temporary Global Note exchangeable for Definitive Notes on and after the Exchange Date] [Permanent Global Note exchangeable for Definitive Notes [on 60 days’ notice given at any time/only upon an Exchange Event]] [Registered Notes: [Global Note registered in the name of a nominee for [a common depositary for Euroclear and Clearstream, Luxembourg/a common Safekeeper for Euroclear and Clearstream, Luxembourg] (that is, held under the New Safekeeping Structure (NSS))] [VPS Notes issued in uncertificated book entry form]

(ii) New Global Note: [Yes][No]

26 Additional Financial Centre(s) [●]/[Not Applicable]

27 Talons for future Coupons to be attached to Definitive Notes (and dates on which such Talons mature):

[Yes, as the Notes have more than 27 coupon payments, Talons may be required if on exchange into definitive form, more than 27 coupon payments are still to be made]/[No]

Signed on behalf of the Issuer:

By: ............................................

Duly authorised

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PART B – OTHER INFORMATION

1 LISTING AND ADMISSION TO TRADING

(i) Listing: [Luxembourg/Oslo/other (specify)]

(ii) Admission to trading: [Application has been made for the Notes to be admitted to trading on the Regulated Market of the Luxembourg Stock Exchange with effect from [●].] [Application has been made for the Notes to be admitted to trading on the Regulated Market of the Oslo Stock Exchange with effect from [●].] [Application has been made for the Notes to be admitted to trading on the [●] with effect from [●].]

(iii) Estimate of total expenses related to admission to trading:

[●]

2 RATINGS

Ratings: The Notes to be issued [have been / are expected to be] rated: [●] by Moody’s Investors Service Limited (“Moody’s”) [●] by Fitch Ratings Limited (“Fitch”) Each of Moody’s and Fitch is established in the European Union and is registered under Regulation (EC) No. 1060/2009 (as amended) (the “CRA Regulation”)

3 INTERESTS OF NATURAL AND LEGAL PERSONS INVOLVED IN THE ISSUE

Save for any fees payable to the [Managers/Dealers], so far as the Issuer is aware, no person involved in the issue of the Notes has an interest material to the offer. The [Managers/Dealers] and their affiliates have engaged and may in the future engage in investment banking and/or commercial transactions with and may perform other services for the Issuer and/or its affiliates in the ordinary course of business.

4 YIELD (Fixed Rate Notes and Reset Notes only)

Indication of yield: [●][N/A]

5 HISTORIC INTEREST RATES (FLOATING RATE NOTES ONLY) [Details of historic [LIBOR/EURIBOR/CMS Rate] rates can be obtained from [Reuters]/ [●].]/[Not Applicable]

6 OPERATIONAL INFORMATION

(i) ISIN Code: [●]

(ii) Common Code: [●]

(iii) Any clearing system(s) other than Euroclear and Clearstream, Luxembourg and the relevant identification number(s):

[●]/[Not Applicable]/[VPS, Norway. VPS identification number: [●]].

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(iv) Delivery: Delivery [against/free of] payment

(v) Names and addresses of additional Paying Agent(s) (if any):

[●]

(vi) Intended to be held in a manner which would allow Eurosystem eligibility:

[Yes. Note that the designation “yes” simply means that the Notes are intended upon issue to be deposited with one of the ICSDs as common safekeeper[ and registered in the name of a nominee of one of the ICSDs acting as common safekeeper][include this text for registered notes] and does not necessarily mean that the Notes will be recognised as eligible collateral for Eurosystem monetary policy and intra day credit operations by the Eurosystem either upon issue or at any or all times during their life. Such recognition will depend upon the ECB being satisfied that the relevant Eurosystem eligibility criteria have been met.] [No. Whilst the designation is specified as “no” at the date of these Final Terms, should the Eurosystem eligibility criteria be amended in the future such that the Notes are capable of meeting them the Notes may then be deposited with one of the ICSDs as common safekeeper [and registered in the name of a nominee of one of the ICSDs acting as common safekeeper][include this text for registered notes]. Note that this does not necessarily mean that the Notes will then be recognised as eligible collateral for Eurosystem monetary policy and intra day credit operations by the Eurosystem at any time during their life. Such recognition will depend upon the ECB being satisfied that the relevant Eurosystem eligibility criteria have been met.]

7 DISTRIBUTION

(i) Method of Distribution: [Syndicated/Non-syndicated]

(ii) If syndicated, names of Managers:

[Not Applicable/[●]]

(iii) Date of [Subscription] Agreement:

[●]

(iv) Stabilisation Manager(s) (if any):

[Not Applicable/specify name]

(v) If non-syndicated, name of relevant Dealer:


(vi) U.S. Selling Restrictions: [TEFRA D/TEFRA C/TEFRA not applicable]

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(vii) Prohibition of Sales to EEA Retail Investors:

[Applicable/Not Applicable] (If the offer of the Notes is concluded prior to 1 January 2018, or on and after that date the Notes clearly do not constitute “packaged” products, “Not Applicable” should be specified. If the offer of the Notes will be concluded on or after 1 January 2018 and the Notes may constitute “packaged” products, “Applicable” should be specified.)

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APPLICABLE PRICING SUPPLEMENT

EXEMPT NOTES OF ANY DENOMINATION

[PROHIBITION OF SALES TO EEA RETAIL INVESTORS – The Notes are not intended, from 1 January 2018, to be offered, sold or otherwise made available to and, with effect from such date, should not be offered, sold or otherwise made available to any retail investor in the European Economic Area (“EEA”). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (“MiFID II”); or (ii) a customer within the meaning of Directive 2002/92/EC (“IMD”), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II. Consequently no key information document required by Regulation (EU) No 1286/2014 (the “PRIIPs Regulation”) for offering or selling the Notes or otherwise making them available to retail investors in the EEA has been prepared and therefore offering or selling the Notes or otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPS Regulation.]

Set out below is the form of Pricing Supplement which will be completed for each Tranche of Exempt Notes, whatever the denomination of those Notes, issued under the Programme.

NO PROSPECTUS IS REQUIRED IN ACCORDANCE WITH DIRECTIVE 2003/71/EC FOR THE ISSUE OF NOTES DESCRIBED BELOW.

Dated [●]

SpareBank 1 SR-Bank ASA

Issue of [Aggregate Nominal Amount of Tranche] [Title of Notes]

under the €10,000,000,000

Euro Medium Term Note Programme

PART A – CONTRACTUAL TERMS

Any person making or intending to make an offer of the Notes may only do so in circumstances in which no obligation arises for the Issuer or any Dealer to publish a prospectus pursuant to Article 3 of the Prospectus Directive or to supplement a prospectus pursuant to Article 16 of the Prospectus Directive, in each case, in relation to such offer.

This document constitutes the Pricing Supplement for the Notes described herein. This document must be read in conjunction with the Prospectus dated [●] [as supplemented by the supplement[s] dated [date[s]]] (the “Prospectus”). Full information on the Issuer and the offer of the Notes is only available on the basis of the combination of this Pricing Supplement and the Prospectus. Copies of the Prospectus may be obtained from [address].

Terms used herein shall be deemed to be defined as such for the purposes of the [Ordinary Note Conditions] [VPS Conditions] set forth in the Prospectus [dated [original date] [and the supplement dated [date]] which are incorporated by reference in the Prospectus].

[Include whichever of the following apply or specify as "Not Applicable". Note that the numbering should remain as set out below, even if "Not Applicable" is indicated for individual paragraphs or subparagraphs. Italics denote directions for completing the Pricing Supplement.]

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[If the Notes have a maturity of less than one year from the date of their issue, the minimum denomination may need to be £100,000 or its equivalent in any other currency.]

1 Series Number: [●]

2 (a) Tranche Number: [●]

(b) Date on which the Notes will be consolidated and form a single Series:

The Notes will be consolidated and form a single Series with [identify earlier Tranches] on [[●]/the Issue Date/the date that is 40 days after the Issue Date/exchange of the Temporary Global Note for interests in the Permanent Global Note, as referred to in paragraph 25 below, which is expected to occur on or about [date]][Not Applicable]

3 Specified Currency or Currencies: [●]

4 Aggregate Nominal Amount: [●]

(a) Series: [●]

(b) Tranche: [●]

5 Issue Price:

[●] per cent. of the Aggregate Nominal Amount [plus accrued interest from [●] (if applicable)]

6 (a) Specified Denominations: [●]

(b) Calculation Amount: [●]

(If only one Specified Denomination, insert the Specified Denomination. If more than one Specified Denomination, insert the highest common factor. Note: There must be a common factor in the case of two or more Specified Denominations.)

7 (a) Issue Date: [●]

(b) Interest Commencement Date: [[●]/Issue Date/Not Applicable]

8 Maturity Date: [●]/Interest Payment Date falling in or nearest to [●]

9 Interest Basis: [[●] per cent. Fixed Rate]

[[specify Reference Rate] +/- [●] per cent. per annum Floating Rate] [Floating Rate: CMS Linked Interest] [Zero Coupon] [Index Linked Interest] [Dual Currency Interest] [Reset Notes] [specify other] (further particulars specified below)

10 Redemption/Payment Basis:

[Redemption at par] [Index Linked Redemption] [Dual Currency Redemption] [Partly Paid] [Instalment]

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[specify other]

11 Change of Interest Basis or Redemption/Payment Basis:

[Specify details of any provision for change of Notes into another Interest Basis or Redemption/Payment Basis][Not Applicable]

12 Put/Call Options:

[Investor Put] [Issuer Call] [(further particulars specified below)] [Not Applicable]

13 (a) Status of the Notes: [Unsubordinated/Subordinated]

(b) [Date [Board] approval for issuance of Notes obtained:

[●] [and [●] respectively]]

PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE

14 Fixed Rate Note Provisions [Applicable/Not Applicable]

(If not applicable, delete the remaining subparagraphs of this paragraph)

(a) Rate(s) of Interest:

[●] per cent. per annum payable in arrear on each Interest Payment Date

(b) Interest Payment Date(s): [●] in each year up to and including the Maturity Date

(Amend appropriately in the case of irregular coupons)

(c) Fixed Coupon Amount(s): [●] per Calculation Amount

(Applicable to Notes in definitive form)

(d) Broken Amount(s):

[[●] per Calculation Amount, payable on the Interest Payment Date falling [in/on] [●]][Not Applicable]

(Applicable to Notes in definitive form)

(e) Day Count Fraction: [30/360/Actual/Actual (ICMA)/specify other]

(f) [Determination Date(s): [[●] in each year][Not Applicable]

(Only relevant where Day Count Fraction is Actual/Actual (ICMA). In such a case, insert regular interest payment dates, ignoring issue date or maturity date in the case of a long or short first or last coupon]

(g) Other terms relating to the method of calculating interest for Fixed Rate Notes which are Exempt Notes:

[None/Give details]

15 Floating Rate Note Provisions [Applicable/Not Applicable]


(a) Specified Period(s)/Specified Interest Payment Dates:

[●] [, subject to adjustment in accordance with the Business Day Convention set out in (b) below/, not subject to any adjustment, as the Business Day Convention in (b) below is specified to be Not

56

Applicable]

(b) Business Day Convention:

[Floating Rate Convention/Following Business Day Convention/Modified Following Business Day Convention/ Preceding Business Day Convention/[specify other]/Not Applicable]

(c) Additional Business Centre(s): [●]

(d) Manner in which the Rate of Interest and Interest Amount is to be determined:

[Screen Rate Determination/ISDA Determination/specify other]

(e) Party responsible for calculating the Rate of Interest and Interest Amount (if not the Principal Paying Agent):

[●]

(f) Screen Rate Determination: [Applicable/Not Applicable]

— Reference Rate and Relevant Financial Centre:

Reference Rate: [[●] month [currency] [LIBOR/EURIBOR/NIBOR/CIBOR/CITA/EONIA/HIBOR/SIBOR/STIBOR/TIBOR/CMS Rate]]

Relevant Financial Centre: [London/Brussels/Oslo/Stockholm] Reference Currency: [●] Designated Maturity: [●] Specified Time: [●] in the Relevant Financial Centre

— Interest Determination Date(s): [●]

— Relevant Screen Page: [●]

(g) ISDA Determination: [Applicable/Not Applicable]

— Floating Rate Option: [●]

— Designated Maturity: [●]

— Reset Date: [●]

(h) Linear Interpolation:

[Not Applicable/Applicable – the Rate of Interest for the [long/short] [first/last] Interest Period shall be calculated using Linear Interpolation (specify for each short or long interest period)]

(i) Margin(s): [+/-][●] per cent. per annum

(j) Minimum Rate of Interest: [●] per cent. per annum

(k) Maximum Rate of Interest: [●] per cent. per annum

(l) Day Count Fraction:

[Actual/Actual (ISDA)][Actual/Actual] [Actual/365 (Fixed)] [Actual/365 (Sterling)] [Actual/360] [30/360][360/360][Bond Basis] [30E/360][Eurobond Basis] 30E/360 (ISDA) Other]

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(m) Fallback provisions, rounding provisions and any other terms relating to the method of calculating interest on Floating Rate Notes which are Exempt Notes, if different from those set out in the Conditions:

[●]

16 Reset Note Provisions

[Applicable/Not Applicable] (If not applicable, delete the remaining sub-paragraphs of this paragraph)

(a) Initial Rate of Interest:

[●] per cent. per annum payable in arrear on each Interest Payment Date

(b) Initial Mid-Swap Rate: [●] per cent.

(c) First Reset Margin: [+/-][●] per cent. per annum

(d) Subsequent Reset Margin: [[+/-][●] per cent. per annum]/[Not Applicable]

(e) Interest Payment Date(s): [●] in each year up to and including the Maturity Date

(f) Fixed Coupon Amount up to (but excluding) the First Reset Date:

[[●] per Calculation Amount][Not Applicable]

(g) Broken Amount(s) up to (but excluding) the First Reset Date:

[[●] per Calculation Amount payable on the Interest Payment Date falling on [●]][Not Applicable]

(h) First Reset Date: [●]

(i) Second Reset Date: [[●]/[Not Applicable]

(j) Subsequent Reset Date(s): [[●] [and [●]]/[Not Applicable]

(k) Relevant Screen Page: [●]

(l) Mid-Swap Rate: [Single Mid-Swap Rate/Mean Mid-Swap Rate]

(m) Original Mid-Swap Rate basis: [Annual/Semi-annual/Quarterly/Monthly]

(n) Mid-Swap Floating Leg Maturity: [●]

(o) Reset Determination Date(s):

[●] (Specify in relation to each Reset Date)

(p) Specified Time: [●]

(q) Prior Rate of Interest or Calculation Agent Determination applicable:

[Prior Rate of Interest/Calculation Agent Determination]

(r) Day Count Fraction: [Actual/Actual (ICMA)]/[30/360]

(s) Determination Date(s): [[●] in each year][Not Applicable]

(t) Calculation Agent: [●][Not Applicable]

17 Zero Coupon Note Provisions [Applicable/Not Applicable]


(a) Accrual Yield: [●] per cent. per annum

(b) Reference Price: [●]

(c) Any other formula/basis of [●]

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determining amount payable for Zero Coupon Notes which are Exempt Notes:

(d) Day Count Fraction in relation to Early Redemption Amounts:

[30/360] [Actual/360] [Actual/365]

18 Index Linked Interest Note Provisions [Applicable/Not Applicable]


(a) Index/Formula: [●]

(b) Calculation Agent: [●]

(c) Party responsible for calculating the Rate of Interest (if not the Calculation Agent) and Interest Amount (if not the Principal Paying Agent):

[●]

(d) Provisions for determining Coupon where calculation by reference to Index and/or Formula is impossible or impracticable:

[●]

(e) Specified Period(s)/Specified Interest Payment Dates:

[●]

(f) Business Day Convention:

[Floating Rate Convention/Following Business Day Convention/Modified Following Business Day Convention/ Preceding Business Day Convention] [Not Applicable]

(g) Additional Business Centre(s): [●]

(h) Minimum Rate of Interest: [●] per cent. per annum

(i) Maximum Rate of Interest: [●] per cent. per annum

(j) Day Count Fraction: [●]

19 Dual Currency Interest Note Provisions [Applicable/Not Applicable]


(a) Rate of Exchange/method of calculating Rate of Exchange:

[●]

(b) Party, if any, responsible for calculating the principal and/or interest due (if not the Principal Paying Agent):

[●]

(c) Provisions applicable where calculation by reference to Rate of Exchange impossible or impracticable:

[●]

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(d) Person at whose option Specified Currency(ies) is/are payable:

[●]

PROVISIONS RELATING TO REDEMPTION

20 Notice periods for Condition 5(c) (Redemption and Purchase – Redemption for Taxation Reasons):


21 Issuer Call: [Applicable/Not Applicable]


(a) Optional Redemption Date(s): [●]

(b) Optional Redemption Amount and method, if any, of calculation of such amount(s):

[[●] per Calculation Amount specify other/see Appendix]

(c) If redeemable in part:

(i) Minimum Redemption Amount:

[●]

(ii) Maximum Redemption Amount:

[●]

(d) Notice periods:


22 Investor Put: [Applicable/Not Applicable]


(a) Optional Redemption Date(s): [●]

(b) Optional Redemption Amount and method, if any, of calculation of such amount(s):

[[●] per Calculation Amount/specify other/see Appendix]

(c) Notice periods:


23 Final Redemption Amount: [[●] per Calculation Amount/specify other/see Appendix]

24 Early Redemption Amount payable on redemption for taxation reasons or on event of default and/or the method of calculating the same (if required):

[[●] per Calculation Amount/specify other/see Appendix]

25 Redemption Amount upon the occurrence of a Capital Event (Subordinated Notes only):

[[●] per Calculation Amount] / [Not Applicable]

GENERAL PROVISIONS APPLICABLE TO THE NOTES

26 Form of Notes:

(a) Form:

[Bearer Notes: [Temporary Global Note exchangeable for a Permanent Global Note which is exchangeable for Bearer Definitive

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Notes [on 60 days' notice given at any time/only upon an Exchange Event] [Temporary Global Note exchangeable for Definitive Bearer Notes on and after the Exchange Date] [Permanent Global Note exchangeable for Definitive Notes [on 60 days' notice given at any time/only upon an Exchange Event/at any time at the request of the Issuer]] [Registered Notes: [Global Note registered in the name of a nominee for [/a common depositary for Euroclear and Clearstream, Luxembourg/a common Safekeeper for Euroclear and Clearstream, Luxembourg] (that is, held under the New Safekeeping Structure (NSS))] [VPS Notes issued in uncertificated book entry form]

(b) New Global Note: [Yes][No]

27 Additional Financial Centre(s): [Not Applicable/[●]]

28 Talons for future Coupons to be attached to Definitive Notes:

[Yes, as the Notes have more than 27 coupon payments, Talons may be required if, on exchange into definitive form, more than 27 coupon payments are still to be made/No]

29 Details relating to Partly Paid Notes: amount of each payment comprising the Issue Price and date on which each payment is to be made and consequences (if any) of failure to pay, including any right of the Issuer to forfeit the Notes and interest due on late payment:


30 Details relating to Instalment Notes: [Applicable/Not Applicable]


— Instalment Amount(s): [●]

— Instalment Date(s): [●]

31 Other terms or special conditions: [Not Applicable/[●]]

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RESPONSIBILITY

The Issuer accept[s] responsibility for the information contained in this Pricing Supplement. [[Relevant third party information] has been extracted from [specify source]. The Issuer confirms that such information has been accurately reproduced and that, so far as it is aware and is able to ascertain from information published by [specify source], no facts have been omitted which would render the reproduced information inaccurate or misleading.

Signed on behalf of the Issuer:

By: ..............................................................

Duly authorised

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PART B – OTHER INFORMATION

1 LISTING

[Application [has been made/is expected to be made] by the Issuer (or on its behalf) for the Notes to be listed on [specify market - note this must not be a regulated market] with effect from [●].] [Not Applicable]

2 RATINGS

Ratings:

[The Notes to be issued [[have been]/[are expected to be]] rated [insert details] by [insert the legal name of the relevant credit rating agency entity(ies)].

3 INTERESTS OF NATURAL AND LEGAL PERSONS INVOLVED IN THE ISSUE

[Save for any fees payable to the [Managers/Dealers], so far as the Issuer is aware, no person involved in the issue of the Notes has an interest material to the offer. The [Managers/Dealers] and their affiliates have engaged, and may in the future engage, in investment banking and/or commercial banking transactions with, and may perform other services for, the Issuer and its affiliates in the ordinary course of business - Amend as appropriate if there are other interests]

4 [USE OF PROCEEDS

Use of Proceeds: [●]]

5 OPERATIONAL INFORMATION

(i) ISIN: [●]

(ii) Common Code: [●]

(iii) Any clearing system(s) other than Euroclear Bank SA/NV and Clearstream, Luxembourg and the relevant identification number(s):

[●]/[Not Applicable]/[VPS, Norway. VPS identification number: [●]]

(iv) Delivery: Delivery [against/free of] payment

(v) Names and addresses of additional Paying Agent(s) (if any):

[●]

(vi) Intended to be held in a manner which would allow Eurosystem eligibility:

[Yes. Note that the designation “yes” simply means that the Notes are intended upon issue to be deposited with one of the ICSDs as common safekeeper [and registered in the name of a nominee of one of the ICSDs acting as common safekeeper][include this text for registered notes] and does not necessarily mean that the Notes will be recognised as eligible collateral for Eurosystem monetary policy and intra day credit operations by the Eurosystem either upon issue or at any or all times during their life. Such recognition will depend upon the ECB being satisfied that Eurosystem eligibility criteria have been met.]

[No. Whilst the designation is specified as “no” at the date of this Pricing Supplement, should the Eurosystem eligibility criteria be amended in the future such that the

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Notes are capable of meeting them the Notes may then be deposited with one of the ICSDs as common safekeeper [and registered in the name of a nominee of one of the ICSDs acting as common safekeeper][include this text for registered notes]. Note that this does not necessarily mean that the Notes will then be recognised as eligible collateral for Eurosystem monetary policy and intra day credit operations by the Eurosystem at any time during their life. Such recognition will depend upon the ECB being satisfied that Eurosystem eligibility criteria have been met.]]

6 DISTRIBUTION

(i) Method of distribution: [Syndicated/Non-syndicated]

(ii) If syndicated, names of Managers: [Not Applicable/[●]]

(iii) Stabilising Manager(s) (if any): [Not Applicable/[●]]

(iv) If non-syndicated, name of relevant Dealer:


(v) U.S. Selling Restrictions: [TEFRA D/TEFRA C/TEFRA not applicable]

(vi) Additional selling restrictions: [Not Applicable/[●]]

(vii) Prohibition of Sales to EEA Retail Investors:

[Applicable/Not Applicable] (If the offer of the Notes is concluded prior to 1 January 2018, or on and after that date the Notes clearly do not constitute “packaged” products, “Not Applicable” should be specified. If the offer of the Notes will be concluded on or after 1 January 2018 and the Notes may constitute “packaged” products, “Applicable” should be specified.)

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TERMS AND CONDITIONS OF THE ORDINARY NOTES

The following are the Terms and Conditions of the Ordinary Notes (the “Ordinary Note Conditions”) which will be incorporated by reference into each Global Note (as defined below) and each Definitive Note, in the latter case only if permitted by the relevant stock exchange (if any) and agreed by the Issuer and the relevant Dealer at the time of issue but, if not so permitted and agreed, such definitive Note will have endorsed thereon or attached thereto such Ordinary Note Conditions. The applicable Pricing Supplement in relation to any Tranche of Exempt Notes may specify other terms and conditions which shall, to the extent so specified or to the extent inconsistent with the following Ordinary Note Conditions, replace or modify the following Ordinary Note Conditions for the purpose of such Notes.

The applicable Final Terms (which term in these Ordinary Note Conditions in relation to Exempt Notes shall be deemed to refer to the applicable Pricing Supplement where relevant, as set out below) (or the relevant provisions thereof) will be endorsed upon, or attached to, each Global Note and Definitive Note. Reference should be made to “Form of the Notes” for a description of the content of the Final Terms which will specify which of such terms are to apply in relation to the relevant Notes.

This Ordinary Note is one of a Series (as defined below) of Notes issued by the Issuer pursuant to the Agency Agreement (as defined below).

References herein to the “Ordinary Notes” or the “Notes” shall be references to the Ordinary Notes of this Series and shall mean:

(i) in relation to any Ordinary Notes represented by a global Note (a “Global Note”), units of the lowest denomination specified in the relevant Final Terms (“Specified Denomination”) in the currency specified in the relevant Final Terms (“Specified Currency”);

(ii) any Global Note;

(iii) any definitive Notes in bearer form (“Bearer Definitive Notes”) issued in exchange for a Global Note in bearer form; and

(iv) any definitive Notes in registered form (“Registered Definitive Notes”) (whether or not issued in exchange for a Global Note in registered form).

The Ordinary Notes, the Receipts and the Coupons (as defined below) have the benefit of an Agency Agreement (such Agency Agreement, as amended and/or supplemented and/or restated from time to time, the “Agency Agreement”) dated 7 July 2017 and made between, among others, the Issuer, Citibank, N.A., London Branch as principal paying agent (the “Principal Paying Agent”, which expression shall include any successor agent) and the other paying agents named therein (together with the Principal Paying Agent, the “Paying Agents”, which expression shall include any additional or successor paying agents), Citigroup Global Markets Deutschland AG as registrar (the “Registrar”, which expression shall include any additional or successor registrar), and Citibank, N.A., London Branch as transfer agent (the “Transfer Agent”, which expression shall include any additional or successor transfer agent and together with any additional transfer agent, the “Transfer Agents”).

Interest bearing Bearer Definitive Notes have interest coupons (“Coupons”) and, in the case of Notes which when issued in definitive form have more than 27 interest payments remaining, talons for further Coupons (“Talons”) attached on issue. Any reference herein to Coupons or coupons shall, unless the context otherwise requires, be deemed to include a reference to Talons or talons. Exempt Notes (as defined below) in definitive form which are repayable in instalments have receipts (“Receipts”) for the payment of the instalments of

65

principal (other than the final instalment) attached on issue. Registered Notes and Bearer Global Notes do not have Coupons or Talons attached on issue.

The final terms for this Ordinary Note (or the relevant provisions thereof) are set out in Part A of the Final Terms attached to or endorsed on this Ordinary Note which complete these Ordinary Note Conditions or, if this Note is a Note which is neither admitted to trading on a regulated market in the European Economic Area nor offered in the European Economic Area in circumstances where a prospectus is required to be published under the Prospectus Directive (an “Exempt Note”), the final terms (or the relevant provisions thereof) are set out in Part A of the Pricing Supplement and may specify other terms and conditions which shall, to the extent so specified or to the extent inconsistent with these Ordinary Note Conditions, replace or modify these Ordinary Note Conditions for the purposes of this Note. References to the “applicable Final Terms” are to Part A of the Final Terms (or, in the case of Exempt Notes, Part A of the Pricing Supplement) (or the relevant provisions thereof) which are attached to or endorsed on this Ordinary Note.

The expression “Prospectus Directive” means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive) to the extent implemented in the relevant Member State of the European Economic Area and includes any relevant implementing measure in the relevant Member State and the expression “2010 PD Amending Directive” means Directive 2010/73/EU.

Any reference to “Noteholders” or “holders” in relation to any Ordinary Notes shall mean (in the case of Bearer Notes) the holders of the Ordinary Notes and (in the case of Registered Notes) the persons in whose name the Ordinary Notes are registered and shall, in relation to any Ordinary Notes represented by a Global Note, be construed as provided below. Any reference herein to “Receiptholders” shall mean the holders of the Receipts and any reference herein to “Couponholder” shall mean the holders of the Coupons and shall, unless the context otherwise requires, include the holders of the Talons.

As used herein, “Tranche” means Ordinary Notes which are identical in all respects (including as to listing and admission to trading) and “Series” means a Tranche of Notes together with any further Tranche or Tranches of Notes which (i) are expressed to be consolidated and form a single series and (ii) have the same terms and conditions or terms and conditions which are the same in all respects save for the amount and date of the first payment of interest thereon and the date from which interest starts to accrue.

The Ordinary Noteholders, the Receiptholders and the Couponholders are entitled to the benefit of the Deed of Covenant (such Deed of Covenant, as amended and/or supplemented and/or restated from time to time, the “Deed of Covenant”) dated 7 July 2017 and made by the Issuer. The original of the Deed of Covenant is held by the common depositary for Euroclear (as defined below) and Clearstream, Luxembourg (as defined below).

Copies of the Agency Agreement and the Deed of Covenant are available for inspection during normal business hours at the specified office of each of the Principal Paying Agent, the Registrar, the other Paying Agents and the Transfer Agents (together referred to as the “Agents”). Copies of the applicable Final Terms are available for viewing at the specified registered office of each of the Issuer and of the Principal Paying Agent. If this Note is an Exempt Note, the applicable Pricing Supplement will only be obtainable by an Ordinary Noteholder holding one or more such Ordinary Notes and such Ordinary Noteholder must produce evidence satisfactory to the Issuer and the relevant Paying Agent as to its holding of such Ordinary Notes and identity. The Ordinary Noteholders, the Receiptholders and the Couponholders are deemed to have notice of, and are entitled to the benefit of, all the provisions of the Agency Agreement, the Deed of Covenant and the applicable Final Terms which are applicable to them. The statements in these Ordinary Note Conditions include summaries of, and are subject to, the detailed provisions of the Agency Agreement.

Words and expressions defined in the Agency Agreement or used in the applicable Final Terms shall have the same meanings where used in these Ordinary Note Conditions unless the context otherwise requires or unless

66

otherwise stated and provided that, in the event of inconsistency between the Agency Agreement and the applicable Final Terms, the applicable Final Terms will prevail.

1 Form, Denomination and Title

The Ordinary Notes are in bearer form (“Bearer Notes”) or registered form (“Registered Notes”), and, in the case of definitive Notes, serially numbered, in the Specified Currency and the Specified Denomination(s). Ordinary Notes of one Specified Denomination may not be exchanged for Ordinary Notes of another Specified Denomination.

Bearer Notes may not be exchanged for Registered Notes or any other form of note issued by the Issuer, and vice versa.

Unless this Ordinary Note is an Exempt Note, this Ordinary Note may be a Fixed Rate Note, a Floating Rate Note (which term shall include a CMS Linked Interest Note if this Note is specified as being a CMS Linked Interest Note in the applicable Final Terms), a Reset Note or a Zero Coupon Note, depending upon the Interest Basis shown in the applicable Final Terms.

If this Ordinary Note is an Exempt Note, this Ordinary Note may be a Fixed Rate Note, a Floating Rate Note (which term shall include a CMS Linked Interest Note if this Note is specified as being a CMS Linked Interest Note in the applicable Pricing Supplement), a Reset Note, a Zero Coupon Note, an Index Linked Interest Note or a Dual Currency Interest Note, depending upon the Interest Basis shown in the applicable Pricing Supplement.

If this Ordinary Note is an Exempt Note, this Note may also be an Index Linked Redemption Note, an Instalment Note, a Dual Currency Redemption Note, a Partly Paid Note, depending on the Redemption/Payment Basis shown in the applicable Pricing Supplement.

This Ordinary Note may also be an Unsubordinated Note or a Subordinated Note, as indicated in the applicable Final Terms.

This Ordinary Note may be a combination of any of the foregoing, depending on the Redemption/Payment Basis shown in the applicable Final Terms.

Bearer Definitive Notes are issued with Coupons attached. Bearer Definitive Notes will also be issued with Talons attached, if applicable and specified in the Final Terms, unless they are Zero Coupon Notes in which case references to Coupons and Couponholders in these Terms and Conditions are not applicable.

Subject as set out below, title to the Bearer Notes, Receipts and Coupons will pass by delivery and title to the Registered Notes upon registration of transfers in accordance with the provisions of the Agency Agreement. The Issuer, the Registrar, any Transfer Agent and any Paying Agent will (except as otherwise required by law) deem and treat the bearer of any Bearer Note, Receipt or Coupon and the registered holder of any Registered Note as the absolute owner thereof (whether or not overdue and notwithstanding any notice of ownership or writing thereon or notice of any previous loss or theft thereof) for all purposes but, in the case of any Global Note, without prejudice to the provisions set out in the next paragraph.

For so long as any of the Ordinary Notes is represented by a Global Note held on behalf of Euroclear Bank SA/NV (“Euroclear”) and/or Clearstream Banking, société anonyme (“Clearstream, Luxembourg”), each person (other than Euroclear or Clearstream, Luxembourg) who is for the time being shown in the records of Euroclear or of Clearstream, Luxembourg, as the holder of a particular nominal amount of such Ordinary Notes (in which regard any certificate or other document issued by Euroclear or Clearstream, Luxembourg as to the nominal amount of such Notes standing to the account of any person shall be conclusive and binding for all purposes save in the case of manifest error) shall be treated by the Issuer, the Principal Paying Agent,

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and any other Paying Agents as the holder of such nominal amount of such Ordinary Notes for all purposes other than with respect to the payment of principal or interest on such nominal amount of such Ordinary Notes, for which purpose, in the case of Notes represented by a Bearer Global Note, the bearer of the relevant Bearer Global Note or, in the case of a Registered Global Note, the registered holder of the relevant Registered Global Note shall be treated by the Issuer, the Principal Paying Agent and any other Paying Agent as the holder of such nominal amount of such Notes in accordance with and subject to the terms of the relevant Bearer Global Note or Registered Global Note, as the case may be, and the expressions “Noteholders” and “holder of Notes” and related expressions shall be construed accordingly. Notes which are represented by a Bearer Global Note or a Registered Global Note will be transferable only in accordance with the rules and procedures for the time being of Euroclear and Clearstream, Luxembourg, as the case may be.

References to Euroclear and/or Clearstream, Luxembourg shall, whenever the context so permits, except in relation to Notes in NGN (as defined in Condition 4(c)) form, be deemed to include a reference to any additional or alternative clearing system specified in the applicable Final Terms.

2 Status of the Ordinary Notes

(a) Status of the Unsubordinated Notes

This Condition 2(a) applies only to Unsubordinated Notes and references to “Ordinary Notes” in this Condition shall be construed accordingly.

The Ordinary Notes of each Tranche constitute direct, unconditional, unsubordinated and unsecured obligations of the Issuer and rank pari passu among themselves and (save for certain debts required to be preferred by law) equally with all other unsecured obligations (including deposits) (other than subordinated obligations, if any) of the Issuer, present and future, from time to time outstanding. So long as any of the Notes remains outstanding (as defined in the Agency Agreement), the Issuer undertakes to ensure that the obligations of the Issuer under the Notes rank and will rank pari passu with all other unsecured and unsubordinated obligations (including deposits) of the Issuer and with all its unsecured and unsubordinated obligations under guarantees of obligations of third parties, in each case except for any obligations preferred by mandatory provisions of applicable law.

(b) Status of the Subordinated Notes

This Condition 2(b) applies only to Subordinated Notes and references to “Ordinary Notes”, “Coupons” and “Noteholders” in this Condition 2(b) shall be construed accordingly.

(i) The Ordinary Notes of each Tranche constitute unsecured subordinated obligations of the Issuer and rank pari passu without any preference among themselves and at least equally with all other Tier 2 capital obligations of the Issuer (or any other obligations which, by their terms, are expressed to rank pari passu with the Subordinated Notes), in each case whether actual or contingent and having a fixed maturity from time to time outstanding. The Notes and the Coupons shall, in the event of a liquidation, dissolution, administration or other winding-up of the Issuer by way of public administration, be subordinated in right of payment only to the claims against the Issuer of all unsubordinated creditors of the Issuer and to claims with greater priority than Tier 2 capital or which are preferred under Norwegian law generally.

(ii) Under Norwegian legislation, if the Issuer’s most recent audited accounts reveal that its net assets are less than 25 per cent. of its share capital and share premium reserve, the general meeting of the Issuer can or the relevant authorities can if the general meeting of the Issuer does not do so: first, cancel the Issuer’s share capital and share premium reserve to compensate for the shortfall, and secondly, if any remaining shortfall exceeds a substantial part (as determined

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by the general meeting of the Issuer or by the relevant Norwegian authorities) of the Issuer’s subordinated loan capital, cancel, in whole or in part, such subordinated loan capital (which would include principal and interest in respect of all Subordinated Notes).

The Issuer shall give not more than 30 nor less than five Business Days’ (as defined in Condition 3(b)) prior notice to the Principal Paying Agent and/or the Registrar, as the case may be, and to the Noteholders in accordance with Condition 13 of any cancellation of principal and/or interest in respect of any Subordinated Notes pursuant to this Condition 2(b).

To the extent that part only of the outstanding principal amount of any Subordinated Notes has been cancelled as provided above, interest will continue to accrue in accordance with the terms hereof on the then outstanding principal amount of such Subordinated Notes.

No Noteholder who becomes, in the event of a liquidation, dissolution or winding-up of the Issuer by way of public administration, indebted to the Issuer shall be entitled to exercise any right of set-off or counterclaim against moneys owed by the Issuer in respect of the Notes held by such Noteholder.

3 Interest

(a) Interest on Fixed Rate Notes

Each Fixed Rate Note bears interest on its outstanding nominal amount from (and including) the Interest Commencement Date at the rate(s) per annum equal to the Rate(s) of Interest. Interest will be payable in arrear on the Interest Payment Date(s) in each year up to (and including) the Maturity Date.

If the Notes are in definitive form, except as provided in the applicable Final Terms, the amount of interest payable on each Interest Payment Date in respect of the Fixed Interest Period ending on (but excluding) such date will amount to the Fixed Coupon Amount. Payments of interest on any Interest Payment Date will, if so specified in the applicable Final Terms, amount to the Broken Amount so specified.

As used in these Ordinary Note Conditions, “Fixed Interest Period” means the period from (and including) an Interest Payment Date (or the Interest Commencement Date) to (but excluding) the next (or first) Interest Payment Date.

Except in the case of Notes in definitive form where an applicable Fixed Coupon Amount or Broken Amount is specified in the applicable Final Terms, interest shall be calculated in respect of any period by applying the Rate of Interest to:

(i) in the case of Fixed Rate Notes which are represented by a Bearer Global Note, the aggregate outstanding nominal amount of the Fixed Rate Notes represented by such Bearer Global Note (or, if they are Partly Paid Notes, the aggregate amount paid up); or

(ii) in the case of Fixed Rate Notes in definitive form, the Calculation Amount,

and, in each case, multiplying such sum by the applicable Day Count Fraction, and rounding the resultant figure to the nearest sub- unit of the relevant Specified Currency, half of any such sub-unit being rounded upwards or otherwise in accordance with applicable market convention. Where the Specified Denomination of a Fixed Rate Note in definitive form is a multiple of the Calculation Amount, the amount of interest payable in respect of such Fixed Rate Note shall be the product of the amount (determined in the manner provided above) for the Calculation Amount and the amount by

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which the Calculation Amount is multiplied to reach the Specified Denomination without any further rounding

In these Ordinary Note Conditions:

“Day Count Fraction” means, in respect of the calculation of an amount of interest in accordance with this Condition 3(a):

(i) if “Actual/Actual (ICMA)” is specified in the applicable Final Terms:

(A) in the case of Ordinary Notes where the number of days in the relevant period from (and including) the most recent Interest Payment Date (or, if none, the Interest Commencement Date) to (but excluding) the relevant payment date (the “Accrual Period”) is equal to or shorter than the Determination Period during which the Accrual Period ends, the number of days in such Accrual Period divided by the product of (1) the number of days in such Determination Period and (2) the number of Determination Dates (as specified in the applicable Final Terms) that would occur in one calendar year; or

(B) in the case of Ordinary Notes where the Accrual Period is longer than the Determination Period during which the Accrual Period ends, the sum of:

(1) the number of days in such Accrual Period falling in the Determination Period in which the Accrual Period begins divided by the product of (x) the number of days in such Determination Period and (y) the number of Determination Dates (as specified in the applicable Final Terms) that would occur in one calendar year; and

(2) the number of days in such Accrual Period falling in the next Determination Period divided by the product of (x) the number of days in such Determination Period and (y) the number of Determination Dates that would occur in one calendar year; and

(ii) if “30/360” is specified in the applicable Final Terms, the number of days in the period from (and including) the most recent Interest Payment Date (or, if none, the Interest Commencement Date) to (but excluding) the relevant payment date (such number of days being calculated on the basis of a year of 360 days with 12 30-day months) divided by 360;

“Determination Period” means each period from (and including) a Determination Date to but excluding the next Determination Date (including, where either the Interest Commencement Date or the final Interest Payment Date is not a Determination Date, the period commencing on the first Determination Date prior to, and ending on the first Determination Date falling after, such date); and

“sub-unit” means, with respect to any currency other than euro, the lowest amount of such currency that is available as legal tender in the country of such currency and, with respect to euro, means one cent.

(b) Interest on Floating Rate Notes

(i) Interest Payment Dates

Each Floating Rate Note bears interest on its outstanding nominal amount from (and including) the Interest Commencement Date and such interest will be payable in arrear on either:

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(A) the Specified Interest Payment Date(s) in each year specified in the applicable Final Terms; or

(B) if no Specified Interest Payment Date(s) is/are specified in the applicable Final Terms, each date (each such date, together with each Specified Interest Payment Date, an “Interest Payment Date”) which falls within the number of months or other period specified as the Specified Period in the applicable Final Terms after the preceding Interest Payment Date or, in the case of the first Interest Payment Date, within the specified period after the Interest Commencement Date.

Such interest will be payable in respect of each Interest Period (which expression shall, in these Ordinary Note Conditions, mean the period from (and including) an Interest Payment Date (or the Interest Commencement Date) to (but excluding) the next (or first) Interest Payment Date).

If a Business Day Convention is specified in the applicable Final Terms and (x) if there is no numerically corresponding day on the calendar month in which an Interest Payment Date should occur or (y) if any Interest Payment Date would otherwise fall on a day which is not a Business Day, then, if the Business Day Convention specified is:

(1) in any case where Specified Periods are specified in accordance with Condition 3(b)(i)(B) above, the Floating Rate Convention, such Interest Payment Date (i) in the case of (x) above, shall be the last day that is a Business Day in the relevant month and the provisions of (B) below shall apply mutatis mutandis or (ii) in the case of (y) above, shall be postponed to the next day which is a Business Day unless it would thereby fall into the next calendar month, in which event (A) such Interest Payment Date shall be brought forward to the immediately preceding Business Day and (B) each subsequent Interest Payment Date shall be the last Business Day in the month which falls in the Specified Period after the preceding applicable Interest Payment Date occurred; or

(2) the Following Business Day Convention, such Interest Payment Date shall be postponed to the next day which is a Business Day; or

(3) the Modified Following Business Day Convention, such Interest Payment Date shall be postponed to the next day which is a Business Day unless it would thereby fall into the next calendar month, in which event such Interest Payment Date shall be brought forward to the immediately preceding Business Day; or

(4) the Preceding Business Day Convention, such Interest Payment Date shall be brought forward to the immediately preceding Business Day.

In these Ordinary Note Conditions, “Business Day” means a day which is both:

(A) a day on which commercial banks and foreign exchange markets settle payments and are open for general business (including dealing in foreign exchange and foreign currency deposits) in each Additional Business Centre (other than TARGET2 System) specified in the applicable Final Terms;

(B) if TARGET2 System is specified as an Additional Business Centre in the applicable Final Terms, a day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer (TARGET2) System (the “TARGET2 System”) is open; and

(C) either (1) in relation to any sum payable in a Specified Currency other than euro, a day on which commercial banks and foreign exchange markets settle payments and are open

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for general business (including dealing in foreign exchange and foreign currency deposits) in the principal financial centre of the country of the relevant Specified Currency or (2) in relation to any sum payable in euro, a day on which TARGET2 System is open.

(ii) Rate of Interest

The Rate of Interest payable from time to time in respect of Floating Rate Notes will be determined in the manner specified in the applicable Final Terms.

(A) ISDA Determination for Floating Rate Notes

Where ISDA Determination is specified in the applicable Final Terms as the manner in which the Rate of Interest is to be determined, the Rate of Interest for each Interest Period will be the relevant ISDA Rate plus or minus (as indicated in the applicable Final Terms) the Margin (if any). For the purposes of this sub- paragraph (A), “ISDA Rate” for an Interest Period means a rate equal to the Floating Rate that would be determined by the Principal Paying Agent under an interest rate swap transaction if the Principal Paying Agent were acting as Calculation Agent for that swap transaction under the terms of an agreement incorporating the 2006 ISDA Definitions, as published by the International Swaps and Derivatives Association, Inc. and as amended and updated as at the Issue Date of the first Tranche of the Notes (the “ISDA Definitions”) and under which:

(1) the Floating Rate Option is as specified in the applicable Final Terms;

(2) the Designated Maturity is a period specified in the applicable Final Terms; and

(3) the relevant Reset Date is the day specified in the applicable Final Terms.

For the purposes of this sub-paragraph (A), “Floating Rate”, “Calculation Agent, Floating Rate Option”, “Designated Maturity” and “Reset Date” have the meanings given to those terms in the ISDA Definitions.

Unless otherwise stated in the applicable Final Terms, the Minimum Rate of Interest shall be deemed to be zero.

(B) Screen Rate Determination for Floating Rate Notes other than CMS Linked Interest Notes

Where Screen Rate Determination is specified in the applicable Final Terms as the manner in which the Rate of Interest is to be determined, the Rate of Interest for each Interest Period will, subject as provided below, be either:

(1) the offered quotation; or

(2) the arithmetic mean (rounded if necessary to the fifth decimal place, with 0.000005 being rounded upwards) of the offered quotations,

(expressed as a percentage rate per annum) for the Reference Rate being the Reference Rate specified in the applicable Final Terms, provided that in the case of Notes other than Exempt Notes, the Reference Rate in respect of Floating Rate Notes other than CMS Linked Interest Notes shall be LIBOR, EURIBOR, NIBOR, CIBOR, CITA, EONIA, TIBOR, HIBOR, SIBOR or STIBOR which appears or appear, as the case may be, on the Relevant Screen Page as at the Specified Time on the Interest Determination Date in question plus or minus (as indicated in the applicable Final Terms) the Margin (if

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any), all as determined by the Principal Paying Agent. If five or more of such offered quotations are available on the Relevant Screen Page, the highest (or, if there is more than one such highest quotation, one only of such quotations) and the lowest (or, if there is more than one such lowest quotation, one only of such quotations) shall be disregarded by the Principal Paying Agent for the purpose of determining the arithmetic mean (rounded as provided above) of such offered quotations.

If the Relevant Screen Page is not available or if, in the case of (1), no offered quotation appears or, in the case of (2), fewer than three such offered quotations appear, in each case at the time specified in the preceding paragraph, the Principal Paying Agent shall request each of the Reference Banks to provide the Principal Paying Agent with its offered quotation (expressed as a percentage rate per annum) for the Reference Rate at approximately the Specified Time on the Interest Determination Date in question. If two or more of the Reference Banks provide the Principal Paying Agent with such offered quotations, the Rate of Interest for the Interest Period shall be the arithmetic mean (rounded if necessary to the fifth decimal place with 0.000005 being rounded upwards) of such offered quotations plus or minus (as appropriate) the Margin (if any), all as determined by the Principal Paying Agent. “Reference Banks” means (i) in the case of a determination of LIBOR, the principal London office of four major banks in the London inter-bank market, (ii) in the case of a determination of EURIBOR, the principal Euro-zone office of four major banks in the Euro-zone inter-bank market, or (iii) in the case of a determination of any other Reference Rate, the principal Relevant Financial Centre office of four major banks in the inter-bank market of the Relevant Financial Centre, in each case selected by the Principal Paying Agent in consultation with the Issuer.

If on any Interest Determination Date one only or none of the Reference Banks provides the Principal Paying Agent with such offered quotations as provided in the preceding paragraph, the Rate of Interest for the relevant Interest Period shall be the rate per annum which the Principal Paying Agent determines as being the arithmetic mean (rounded if necessary to the fifth decimal place, with 0.000005 being rounded upwards) of the rates, as communicated to (and at the request of) the Principal Paying Agent by the Reference Banks or any two or more of them, at which such banks were offered, at approximately the Specified Time on the relevant Interest Determination Date, deposits in the Specified Currency for a period equal to that which would have been used for the Reference Rate by leading banks in the London inter-bank market (if the Reference Rate is LIBOR) or the Euro-zone inter-bank market (if the Reference Rate is EURIBOR) or the inter-bank market of the Relevant Financial Centre (if any other Reference Rate is used) plus or minus (as appropriate) the Margin (if any) or, if fewer than two of the Reference Banks provide the Principal Paying Agent with such offered rates, the offered rate for deposits in the Specified Currency for a period equal to that which would have been used for the Reference Rate, or the arithmetic mean (rounded as provided above) of the offered rates for deposits in the Specified Currency for a period equal to that which would have been used for the Reference Rate, at which, at approximately the Specified Time on the relevant Interest Determination Date, any one or more banks (which bank or banks is or are in the opinion of the Issuer suitable for such purpose) informs the Principal Paying Agent it is quoting to leading banks in the London inter-bank market (if the Reference Rate is LIBOR) or the Euro-zone inter-bank market (if the Reference Rate is EURIBOR) or the inter-bank market of the Relevant Financial Centre (if any other Reference Rate is used) plus or minus (as appropriate) the Margin (if any), provided that, if the Rate of

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Interest cannot be determined in accordance with the foregoing provisions of this paragraph, the Rate of Interest shall be determined as at the last preceding Interest Determination Date (though substituting, where a different Margin is to be applied to the relevant Interest Period from that which applied to the last preceding Interest Period, the Margin relating to the relevant Interest Period in place of the Margin relating to that last preceding Interest Period).

(C) Screen Rate Determination for Floating Rate Notes which are CMS Linked Interest Notes

Where Screen Rate Determination is specified in the applicable Final Terms as the manner in which the Rate of Interest is to be determined and where “CMS Rate” is specified as the Reference Rate in the applicable Final Terms, the Rate of Interest for each Interest Period will be determined by the Calculation Agent by reference to the following formula:

CMS Rate plus Margin

If (for the purposes of determining the applicable CMS Rate) the Relevant Screen Page is not available, the Calculation Agent shall request each of the Reference Banks to provide the Calculation Agent with its quotation for the Relevant Swap Rate at approximately the Specified Time on the Interest Determination Date in question. If three or more of the Reference Banks provide the Calculation Agent with such quotation, the CMS Rate for such Interest Period shall be the arithmetic mean of such quotations, eliminating (only where four or five of the Reference Banks provide such quotation) the highest quotation (or, in the event of equality, one of the highest) and the lowest quotation (or, in the event of equality, one of the lowest).

If on any Interest Determination Date less than three or none of the Reference Banks provides the Calculation Agent with such quotations as provided in the preceding paragraph, the CMS Rate shall be determined as at the last preceding Interest Determination Date (though substituting, where a different Margin is to be applied to the relevant Interest Period from that which applied to the last preceding Interest Period, the Margin relating to the relevant Interest Period, in place of the Margin relating to that last preceding Interest Period).

For the purposes of this sub-paragraph (C):

“CMS Rate” shall mean the applicable swap rate for swap transactions in the Reference Currency with a maturity of the Designated Maturity, expressed as a percentage, which appears on the Relevant Screen Page as at the Specified Time on the Interest Determination Date in question, all as determined by the Calculation Agent

“Reference Banks” means (i) where the Reference Currency is Euro, the principal office of five leading swap dealers in the Eurozone inter-bank market, (ii) where the Reference Currency is Sterling, the principal London office of five leading swap dealers in the London inter-bank market, (iii) where the Reference Currency is United States dollars, the principal New York City office of five leading swap dealers in the New York City inter-bank market, or (iv) in the case of any other Reference Currency, the principal Relevant Financial Centre office of five leading swap dealers in the inter-bank market, in each case selected by the Calculation Agent in consultation with the Issuer.

“Relevant Swap Rate” means:

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(i) where the Reference Currency is Euro, the mid-market annual swap rate determined on the basis of the arithmetic mean of the bid and offered rates for the annual fixed leg, calculated on a 30/360 day count basis, of a fixed-for-floating euro interest rate swap transaction with a term equal to the Designated Maturity commencing on the first day of the relevant Interest Period and in a Representative Amount with an acknowledged dealer of good credit in the swap market, where the floating leg, in each case calculated on an Actual/360 day count basis, is equivalent to EUR-EURIBOR-Reuters (as defined in the ISDA Definitions, as published by the International Swaps and Derivatives Association, Inc. and as amended and updated as at the Issue Date of the first Tranche of the Notes (the "ISDA Definitions")) with a designated maturity determined by the Calculation Agent by reference to standard market practice and/or the ISDA Definitions;

(ii) where the Reference Currency is Sterling, the mid-market semi-annual swap rate determined on the basis of the arithmetic mean of the bid and offered rates for the semi-annual fixed leg, calculated on an Actual/365 (Fixed) day count basis, of a fixed-for-floating Sterling interest rate swap transaction with a term equal to the Designated Maturity commencing on the first day of the relevant Interest Period and in a Representative Amount with an acknowledged dealer of good credit in the swap market, where the floating leg, in each case calculated on an Actual/365 (Fixed) day count basis, is equivalent (A) if the Designated Maturity is greater than one year, to GBP-LIBOR-BBA (as defined in the ISDA Definitions) with a designated maturity of six months or (B) if the Designated Maturity is one year or less, to GBP-LIBOR-BBA (as defined in the ISDA Definitions) with a designated maturity of three months;

(iii) where the Reference Currency is United States dollars, the mid-market semi-annual swap rate determined on the basis of the mean of the bid and offered rates for the semi-annual fixed leg, calculated on a 30/360 day count basis, of a fixed-for-floating United States dollar interest rate swap transaction with a term equal to the Designated Maturity commencing on the first day of the relevant Interest Period and in a Representative Amount with an acknowledged dealer of good credit in the swap market, where the floating leg, calculated on an Actual/360 day count basis, is equivalent to USD-LIBOR-BBA (as defined in the ISDA Definitions) with a designated maturity of three months; and

(iv) in the case of Exempt Notes only, where the Reference Currency is any other currency or if the applicable Final Terms specifies otherwise, the mid-market swap rate as determined in accordance with the applicable Final Terms.

“Representative Amount” means an amount that is representative for a single transaction in the relevant market at the relevant time.

(iii) Minimum Rate of Interest and/or Maximum Rate of Interest

If the applicable Final Terms specifies a Minimum Rate of Interest for any Interest Period, then, if the Rate of Interest in respect of such Interest Period determined in accordance with the provisions of paragraph (ii) above is less than such Minimum Rate of Interest, the Rate of Interest for such Interest Period shall be such Minimum Rate of Interest.

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If the applicable Final Terms specifies a Maximum Rate of Interest for any Interest Period, then, if the Rate of Interest in respect of such Interest Period determined in accordance with the provisions of paragraph (ii) above is greater than such Maximum Rate of Interest, the Rate of Interest for such Interest Period shall be such Maximum Rate of Interest.

(iv) Determination of Rate of Interest and Calculation of Interest Amounts

The Principal Paying Agent, in the case of Floating Rate Notes other than Floating Rate Notes which are CMS Linked Interest Notes, and the Calculation Agent, in the case of Floating Rate Notes which are CMS Linked Interest Notes, will at or as soon as practicable after each time at which the Rate of Interest is to be determined, determine the Rate of Interest for the relevant Interest Period. In the case of Floating Rate Notes which are CMS Linked Interest Notes, the Calculation Agent will notify the Principal Paying Agent of the Rate of Interest for the relevant Interest Period as soon as practicable after calculating the same.

The Principal Paying Agent or, in the case of Floating Rate Notes which are CMS Linked Interest Notes, the Calculation Agent, will calculate the amount of interest (the “Interest Amount”) payable on the Floating Rate Notes for the relevant Interest Period by applying the Rate of Interest to:

(A) in the case of Floating Rate Notes which are represented by a Bearer Global Note, the aggregate outstanding nominal amount of the Notes represented by such Bearer Global Note (or, if they are Partly Paid Notes, the aggregate amount paid up); or

(B) in the case of Floating Rate Notes in definitive form, the Calculation Amount,

and, in each case, multiplying such sum by the applicable Day Count Fraction, and rounding the resultant figure to the nearest sub-unit of the relevant Specified Currency, half of any such sub-unit being rounded upwards or otherwise in accordance with applicable market convention. Where the Specified Denomination of a Floating Rate Note in definitive form is a multiple of the Calculation Amount, the Interest Amount payable in respect of such Note shall be the product of the amount (determined in the manner provided above) for the Calculation Amount and the amount by which the Calculation Amount is multiplied to reach the Specified Denomination without any further rounding.

“Day Count Fraction” means, in respect of the calculation of an amount of interest in accordance with this Condition 3(b):

(i) if “Actual/Actual (ISDA)” or “Actual/Actual” is specified in the applicable Final Terms, the actual number of days in the Interest Period divided by 365 (or, if any portion of that Interest Period falls in a leap year, the sum of (I) the actual number of days in that portion of the Interest Period falling in a leap year divided by 366 and (II) the actual number of days in that portion of the Interest Period falling in a non- leap year divided by 365);

(ii) if “Actual/365 (Fixed)” is specified in the applicable Final Terms, the actual number of days in the Interest Period divided by 365;

(iii) if “Actual/365 (Sterling)” is specified in the applicable Final Terms, the actual number of days in the Interest Period divided by 365 or, in the case of an Interest Payment Date falling in a leap year, 366;

(iv) if “Actual/360” is specified in the applicable Final Terms, the actual number of days in the Interest Period divided by 360;

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(v) if “30/360”, “360/360” or “Bond Basis” is specified in the applicable Final Terms, the number of days in the Interest Period divided by 360, calculated on a formula basis as follows:

Day Count Fraction = �360 x �Y2 - Y1 �� + �30 x �M2 - M1 ��+�D2 - D1�360

where:

“Y1” is the year, expressed as a number, in which the first day of the Interest Period falls;

“Y2” is the year, expressed as a number, in which the day immediately following the last day of the Interest Period falls;

“M1” is the calendar month, expressed as a number, in which the first day of the Interest Period falls;

“M2” is the calendar month, expressed as a number, in which the day immediately following the last day of the Interest Period falls;

“D1” is the first calendar day, expressed as a number, of the Interest Period, unless such number is 31, in which case D1 will be 30; and

“D2” is the calendar day, expressed as a number, immediately following the last day included in the Interest Period, unless such number would be 31 and D1 is greater than 29, in which case D2 will be 30;

(vi) if “30E/360” or “Eurobond Basis” is specified in the applicable Final Terms, the number of days in the Interest Period divided by 360, calculated on a formula basis as follows:


where:





“D1” is the first calendar day, expressed as a number, of the Interest Period, unless such number would be 31, in which case D1 will be 30; and

“D2” is the calendar day, expressed as a number, immediately following the last day included in the Interest Period, unless such number would be 31, in which case D2 will be 30;

(vii) if “30E/360 (ISDA)” is specified in the applicable Final Terms, the number of days in the Interest Period divided by 360, calculated on a formula basis as follows:

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where:





“D1” is the first calendar day, expressed as a number, of the Interest Period, unless (i) that day is the last day of February or (ii) such number would be 31, in which case D1 will be 30; and

“D2” is the calendar day, expressed as a number, immediately following the last day included in the Interest Period, unless (i) that day is the last day of February but not the Maturity Date or (ii) such number would be 31 and D2 will be 30.

(v) Linear Interpolation

Where Linear Interpolation is specified as applicable in respect of an Interest Period in the applicable Final Terms, the Rate of Interest for such Interest Period shall be calculated by the Principal Paying Agent by straight line linear interpolation by reference to two rates based on the relevant Reference Rate (where Screen Rate Determination is specified as applicable in the applicable Final Terms) or the relevant Floating Rate Option (where ISDA Determination is specified as applicable in the applicable Final Terms), one of which shall be determined as if the Designated Maturity were the period of time for which rates are available next shorter than the length of the relevant Interest Period and the other of which shall be determined as if the Designated Maturity were the period of time for which rates are available next longer than the length of the relevant Interest Period provided however that if there is no rate available for a period of time next shorter or, as the case may be, next longer, then the Principal Paying Agent shall determine such rate at such time and by reference to such sources as it determines appropriate.

(vi) Notification of Rate of Interest and Interest Amounts

The Principal Paying Agent or, in the case of the CMS Linked Interest Notes, the Calculation Agent, will cause the Rate of Interest and each Interest Amount for each Interest Period and the relevant Interest Payment Date to be notified to the Issuer and any stock exchange on which the relevant Floating Rate Notes are for the time being listed (by no later than the first day of each Interest Period) and notice thereof to be published in accordance with Condition 13 as soon as possible after their determination but in no event later than the fourth London Business Day thereafter. Each Interest Amount and Interest Payment Date so notified may subsequently be amended (or appropriate alternative arrangements made by way of adjustment) without prior notice in the event of an extension or shortening of the Interest Period. Any such amendment will promptly be notified to each stock exchange on which the relevant Floating Rate Notes are for the time being listed and to the Noteholders in accordance with Condition 13. For the

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purposes of this paragraph, the expression “London Business Day” means a day (other than a Saturday or a Sunday) on which banks and foreign exchange markets are open for general business in London.

(vii) Certificates to be final

All certificates, communications, opinions, determinations, calculations, quotations and decisions given, expressed, made or obtained for the purposes of the provisions of this Condition 3, whether by the Principal Paying Agent or, if applicable, the Calculation Agent, shall (in the absence of wilful default, bad faith or manifest error) be binding on the Issuer, the Principal Paying Agent, the Calculation Agent (if applicable), the other Paying Agents and all Ordinary Noteholders, Receiptholders and Couponholders and (in the absence as aforesaid) no liability to the Issuer, the Ordinary Noteholders, Receiptholders or the Couponholders shall attach to the Principal Paying Agent or the Calculation Agent (if applicable) in connection with the exercise or non-exercise by it of its powers, duties and discretions pursuant to such provisions.

(c) Exempt Notes

In the case of Exempt Notes which are also Floating Rate Notes where the applicable Pricing Supplement identifies that Screen Rate Determination applies to the calculation of interest, if the Reference Rate from time to time is specified in the applicable Pricing Supplement as being other than LIBOR, EURIBOR or CMS Rate, the Rate of Interest in respect of such Exempt Notes will be determined as provided in the applicable Pricing Supplement.

The rate or amount of interest payable in respect of Exempt Notes which are not also Fixed Rate Notes or Floating Rate Notes shall be determined in the manner specified in the applicable Pricing Supplement, provided that where such Notes are Index Linked Interest Notes the provisions of Condition 3(b) shall, save to the extent amended in the applicable Pricing Supplement, apply as if the references therein to Floating Rate Notes and to the Principal Paying Agent were references to Index Linked Interest Notes and the Calculation Agent, respectively, and provided further that the Calculation Agent will notify the Principal Paying Agent of the Rate of Interest for the relevant Interest Period as soon as practicable after calculating the same.

In the case of Partly Paid Notes (other than Partly Paid Notes which are Zero Coupon Notes), interest will accrue as aforesaid on the paid-up nominal amount of such Notes and otherwise as specified in the applicable Pricing Supplement.

(d) Interest on Reset Notes

(i) Rate of Interest

Each Reset Note bears interest:

(a) from (and including) the Interest Commencement Date to (but excluding) the First Reset Date (the “Initial Period”), at the Initial Rate of Interest;

(b) for the First Reset Period, at the First Reset Rate of Interest; and

(c) for each Subsequent Reset Period thereafter (if any) to (but excluding) the Maturity Date, at the relevant Subsequent Reset Rate of Interest.

Interest will be payable, in each case, in arrear on the Interest Payment Date(s) in each year up to (and including) the Maturity Date.

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If the Notes are in definitive form, except as provided in the applicable Final Terms, the amount of interest payable on each Interest Payment Date in respect of each Interest Period falling in the Initial Period will amount to the Fixed Coupon Amount. Payments of interest on the first Interest Payment Date will, if so specified in the applicable Final Terms or, as the case may be, the applicable Pricing Supplement, amount to the Broken Amount(s) so specified.

The Principal Paying Agent or, if so specified in the applicable Final Terms, the Calculation Agent will at or as soon as practicable after each time at which a Rate of Interest in respect of a Reset Period is to be determined, determine the relevant Rate of Interest for such Reset Period. If a Calculation Agent is specified in the applicable Final Terms, the Calculation Agent will notify the Principal Paying Agent of the Rate of Interest for the relevant Reset Period as soon as practicable after calculating the same.

Except in the case of Notes in definitive form where a Fixed Coupon Amount or Broken Amount is specified in the applicable Final Terms, the Principal Paying Agent will calculate the amount of interest (the “Reset Notes Interest Amount”) payable on the Reset Notes for the relevant Interest Period by applying the relevant Rate of Interest to:

(A) in the case of Reset Notes which are represented by a Global Note, the aggregate outstanding nominal amount of the Notes represented by such Global Note; or

(B) in the case of Reset Notes in definitive form, the Calculation Amount;

and, in each case, multiplying such sum by the applicable Day Count Fraction, and rounding the resultant figure to the nearest sub-unit of the relevant Specified Currency, half of any such sub-unit being rounded upwards or otherwise in accordance with applicable market convention. Where the Specified Denomination of a Reset Note in definitive form is a multiple of the Calculation Amount, the Reset Notes Interest Amount payable in respect of such Note shall be the aggregate of the amounts (determined in the manner provided above) for each Calculation Amount comprising the Specified Denomination, without any further rounding.

(ii) Fallbacks

If on any Reset Determination Date, the Relevant Screen Page is not available or the Mid-Swap Rate does not appear on the Relevant Screen Page as at the Specified Time on such Reset Determination Date, the Rate of Interest applicable to the Notes in respect of each Interest Period falling in the relevant Reset Period will be determined by the Principal Paying Agent, or if so specified in the applicable Final Terms, the Calculation Agent on the following basis:

(a) the Principal Paying Agent, or if so specified in the applicable Final Terms, the Calculation Agent shall request each of the Reset Reference Banks to provide the Principal Paying Agent, or if so specified in the applicable Final Terms, the Calculation Agent with its Mid-Market Swap Rate Quotation as at approximately the Specified Time on the Reset Determination Date in question;

(b) if at least three of the Reset Reference Banks provide the Principal Paying Agent or, if so specified in the applicable Final Terms, the Calculation Agent with Mid-Market Swap Rate Quotations, the First Reset Rate of Interest or the Subsequent Reset Rate of Interest (as applicable) for the relevant Reset Period will be equal to the sum of (A) the arithmetic mean (rounded, if necessary, to the nearest 0.001 per cent. (0.0005 per cent. being rounded upwards)) of the relevant quotations provided, eliminating the highest quotation (or, in the event of equality, one of the highest) and the lowest (or, in the event of equality, one of the lowest) and (B) the Relevant Reset Margin, all as determined by the Principal Paying Agent or, if so specified in the applicable Final Terms, the Calculation Agent in consultation with the Issuer;

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(c) if only two relevant quotations are provided, the First Reset Rate of Interest or the Subsequent Reset Rate of Interest (as applicable) for the relevant Reset Period will be equal to the sum of (A) the arithmetic mean (rounded as aforesaid) of the relevant quotations provided and (B) the Relevant Reset Margin, all as determined by the Principal Paying Agent or, if so specified in the applicable Final Terms, the Calculation Agent;

(d) if only one relevant quotation is provided, the First Reset Rate of Interest or the Subsequent Reset Rate of Interest (as applicable) for the relevant Reset Period will be equal to the sum of (A) the relevant quotation provided and (B) the Relevant Reset Margin, all as determined by the Principal Paying Agent or, if so specified in the applicable Final Terms, the Calculation Agent; and

(e) if none of the Reset Reference Banks provides the Principal Paying Agent or, if so specified in the applicable Final Terms, the Calculation Agent with a Mid-Market Swap Rate Quotation as provided in the foregoing provisions of this Condition 3(d), the First Reset Rate of Interest or the Subsequent Reset Rate of Interest (as applicable) will be either:

(A) if Prior Rate of Interest is so specified in the applicable Final Terms, equal to the sum of (A) the Mid-Swap Rate determined on the last preceding Reset Determination Date and (B) the Relevant Reset Margin or, in the case of the first Reset Determination Date, the First Reset Rate of Interest will be equal to the sum of (A) the Initial Mid-Swap Rate and (B) the Relevant Reset Margin, all as determined by the Principal Paying Agent or, if so specified in the applicable Final Terms, the Calculation Agent in consultation with the Issuer; or

(B) if Calculation Agent Determination is so specified in the applicable Final Terms, determined by the Principal Paying Agent or, if so specified in the applicable Final Terms, the Calculation Agent in consultation with the Issuer taking into consideration all available information that it in good faith deems relevant.

(iii) Mid-Swap Rate Conversion

This Condition 3(d)(iii) is only applicable if Mid-Swap Rate Conversion is specified in the applicable Final Terms as being applicable. If Mid-Swap Rate Conversion is so specified as being applicable, the First Reset Rate of Interest and, if applicable, each Subsequent Reset Rate of Interest will be converted by the Principal Paying Agent or, if so specified in the applicable Final Terms, the Calculation Agent from the Original Mid-Swap Rate Basis specified in the applicable Final Terms to a basis which matches the per annum frequency of Interest Payment Dates in respect of the Notes (such calculation to be determined by the Issuer in conjunction with a leading financial institution selected by it).

(iv) Notification of Rate of Interest and Interest Amounts

In respect of a Reset Period, the Principal Paying Agent will cause the relevant Rate of Interest in respect of such Reset Period and each Reset Notes Interest Amount for each Interest Period falling in such Reset Period to be notified to the Issuer and any stock exchange on which the relevant Reset Notes are for the time being listed (by no later than the first day of each Interest Period) and notice thereof to be published in accordance with Condition 13 as soon as possible after their determination but in no event later than the fourth London Business Day (as defined in Condition 3(b)(vii)) thereafter. Each Reset Notes Interest Amount so notified may subsequently be amended (or appropriate alternative arrangements made by way of adjustment) without prior notice in the event of an extension or shortening of the Interest Period. Any such amendment will be promptly notified to each stock exchange on which the relevant Reset Notes are for the time being listed and to the Noteholders in accordance with Condition 13.

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(v) Certificates to be final

All certificates, communications, opinions, determinations, calculations, quotations and decisions given, expressed, made or obtained for the purposes of the provisions of this Condition 3, whether by the Principal Paying Agent or, if applicable, the Calculation Agent, shall (in the absence of wilful default, bad faith or manifest error) be binding on the Issuer, the Principal Paying Agent, the Calculation Agent (if applicable), the other Paying Agents and all Ordinary Noteholders, Receiptholders and Couponholders and (in the absence as aforesaid) no liability to the Issuer, the Ordinary Noteholders, Receiptholders or the Couponholders shall attach to the Principal Paying Agent or the Calculation Agent (if applicable) in connection with the exercise or non-exercise by it of its powers, duties and discretions pursuant to such provisions.

(vi) Definitions

In this Condition 3(d), the following terms shall bear the following meanings:

“Day Count Fraction” has the meaning given in Condition 3(a).

“First Reset Period” means the period from (and including) the First Reset Date to (but excluding) the Second Reset Date or, if no such Second Reset Date is specified in the applicable Final Terms, the Maturity Date.

“First Reset Rate of Interest” means, in respect of the First Reset Period and subject to Condition 3(d)(ii) and Condition 3(d)(iii), the rate of interest determined by the Principal Paying Agent or, if so specified in the applicable Final Terms, the Calculation Agent on the relevant Reset Determination Date as the sum of the relevant Mid-Swap Rate and the First Reset Margin.

“Interest Period” has the meaning given in Condition 3(b).

“Mid-Market Swap Rate” means for any Reset Period the arithmetic mean of the bid and offered rates for the fixed leg payable with a frequency equivalent to the Original Mid-Swap Rate Basis (calculated on the day count basis customary for fixed rate payments in the Specified Currency as determined by the Principal Paying Agent or, if so specified in the applicable Final Terms, the Calculation Agent) of a fixed-for-floating interest rate swap transaction in the Specified Currency which transaction (i) has a term equal to the relevant Reset Period and commencing on the relevant Reset Date, (ii) is in an amount that is representative for a single transaction in the relevant market at the relevant time with an acknowledged dealer of good credit in the swap market and (iii) has a floating leg based on the Mid-Swap Floating Leg Benchmark Rate for the Mid-Swap Floating Leg Maturity (calculated on the day count basis customary for floating rate payments in the Specified Currency as determined by the Principal Paying Agent or, if so specified in the applicable Final Terms, the Calculation Agent).

“Mid-Market Swap Rate Quotation” means a quotation (expressed as a percentage rate per annum) for the relevant Mid-Market Swap Rate.

“Mid-Swap Floating Leg Benchmark Rate” means EURIBOR (if the Specified Currency is euro), LIBOR (if the Specified Currency is U.S. dollars, Pounds Sterling or Swiss Francs), NIBOR (if the Specified Currency is Norwegian Kroner) or (in the case of any other Specified Currency) the benchmark rate most closely connected with such Specified Currency and selected by the Principal Paying Agent or, if so specified in the applicable Final Terms, the Calculation Agent in its discretion after consultation with the Issuer.

“Mid-Swap Rate” means, in relation to a Reset Determination Date and subject to Condition 3(d)(ii), either:

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(a) if Single Mid-Swap Rate is specified in the applicable Final Terms, the rate for swaps in the Specified Currency:

(A) with a term equal to the relevant Reset Period; and

(B) commencing on the relevant Reset Date,

which appears on the Relevant Screen Page; or

(b) if Mean Mid-Swap Rate is specified in the applicable Final Terms or, as the case may be, the applicable Pricing Supplement, the arithmetic mean (expressed as a percentage rate per annum and rounded, if necessary, to the nearest 0.001 per cent. (0.0005 per cent. being rounded upwards)) of the bid and offered swap rate quotations for swaps in the Specified Currency:



which appear on the Relevant Screen Page,

in either case, as at approximately the Specified Time on such Reset Determination Date, all as determined by the Principal Paying Agent or, if so specified in the applicable Final Terms, the Calculation Agent.

“Original Mid-Swap Rate Basis” has the meaning given in the applicable Final Terms. In the case of Notes other than Exempt Notes, the Original Mid-Swap Rate Basis shall be annual, semi-annual, quarterly or monthly.

“Rate of Interest” means the Initial Rate of Interest, the First Reset Rate of Interest or the relevant Subsequent Reset Rate of Interest, as applicable.

“Relevant Reset Margin” means, in respect of a Reset Period, whichever of the First Reset Margin or the Subsequent Reset Margin is applicable for the purpose of determining the Rate of Interest in respect of such Reset Period.

“Reset Date” means the First Reset Date, the Second Reset Date and each Subsequent Reset Date (as applicable).

“Reset Period” means the First Reset Period or a Subsequent Reset Period, as the case may be.

“Reset Reference Banks” means the principal office in the principal financial centre of the Specified Currency of five major banks in the swap, money, securities or other market most closely connected with the relevant Mid-Swap Rate as selected by the Principal Paying Agent or, if so specified in the applicable Final Terms, the Calculation Agent in consultation with the Issuer.

“Subsequent Reset Period” means the period from (and including) the Second Reset Date to (but excluding) the next Subsequent Reset Date, and each successive period from (and including) a Subsequent Reset Date to (but excluding) the next succeeding Subsequent Reset Date or the Maturity Date, as the case may be.

“Subsequent Reset Rate of Interest” means, in respect of any Subsequent Reset Period and subject to Condition 3(d)(ii) and Condition 3(d)(iii), the rate of interest determined by the Principal Paying Agent or, if so specified in the applicable Final Terms, the Calculation Agent on the relevant Reset Determination Date as the sum of the relevant Mid-Swap Rate and the relevant Subsequent Reset Margin.

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(e) Accrual of interest

Each Ordinary Note (or in the case of the redemption of part only of an Ordinary Note, that part only of such Ordinary Note) will cease to bear interest (if any) from the date for its redemption unless, upon due presentation thereof, payment of principal is improperly withheld or refused. In such event, interest will continue to accrue until whichever is the earlier of:

(i) the date on which all amounts due in respect of such Ordinary Note have been paid; and

(ii) five days after the date on which the full amount of the monies payable in respect of such Ordinary Note has been received by the Principal Paying Agent and notice to that effect has been given to the Ordinary Noteholders in accordance with Condition 13 below.

4 Payments

(a) Method of payment

Subject as provided below:

(i) payments in a Specified Currency other than euro will be made by credit or transfer to an account in the relevant Specified Currency maintained by the payee with, or, at the option of the payee, by a cheque in such Specified Currency drawn on, a bank in the principal financial centre of the country of such Specified Currency; and

(ii) payments in euro will be made by credit or transfer to a euro account (or any other account to which euro may be credited or transferred) specified by the payee.

In the case of Bearer Notes, payments in U.S. dollars will be made by transfer to a U.S. dollar account maintained by the payee with a bank outside of the United States (which expression, as used in this Condition 6 below, means the United States of America, including the State and the District of Columbia, its territories, its possessions and other areas subject to its jurisdiction), or by cheque drawn on a United States bank. All payments in respect of Bearer Notes will be made to accounts located outside the United States, or by cheque mailed to an address outside of the United States, except as may be permitted by United States tax law in effect at the time of such payment without detriment to the Issuer.

Payments will be subject in all cases to any fiscal or other laws and regulations applicable thereto in the place of payment or other laws to which the Issuer agrees to be subject and the Issuer will not be liable for any taxes or duties of whatever nature imposed or levied by such laws, regulations, directives or agreements, but without prejudice to the provisions of Condition 6 below. References herein to “specified currency” will include any successor currency under applicable law.

(b) Presentation of Bearer Definitive Notes and Coupons

Payments of principal and interest (if any) in respect of Bearer Definitive Notes will (subject as provided below) be made in the manner provided in paragraph (a) above only against presentation and surrender (or, in the case of part payment of any sum due, endorsement) of Bearer Definitive Notes, and payments of interest in respect of Bearer Definitive Notes will (subject as provided below) be made as aforesaid only against presentation and surrender (or, in the case of part payment of any sum due, endorsement) of Coupons, in each case at the specified office of any Paying Agent outside the United States (which expression, as used herein, means the United States of America (including the States and the District of Columbia, its territories, its possessions and other areas subject to its jurisdiction)).

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Fixed Rate Notes in definitive bearer form (other than Long Maturity Notes (as defined below)) should be presented for payment together with all unmatured Coupons appertaining thereto (which expression shall for this purpose include Coupons falling to be issued on exchange of matured Talons), failing which the amount of any missing unmatured Coupon (or, in the case of payment not being made in full, the same proportion of the amount of such missing unmatured Coupon as the sum so paid bears to the sum due) will be deducted from the sum due for payment. Each amount of principal so deducted will be paid in the manner mentioned above against surrender of the relative missing Coupon at any time before the expiry of 10 years after the Relevant Date (as defined in Condition 18 below) in respect of such principal (whether or not such Coupon would otherwise have become void under Condition 7 below) or, if later, five years from the date on which such Coupon would otherwise have become due, but in no event thereafter.

Upon any Fixed Rate Note in definitive bearer form becoming due and repayable prior to its Maturity Date, all unmatured Talons (if any) appertaining thereto will become void and no further Coupons will be issued in respect thereof.

Upon the date on which any Floating Rate Note, Reset Note or Long Maturity Note in definitive bearer form becomes due and repayable, unmatured Coupons and Talons (if any) relating thereto (whether or not attached) shall become void and no payment or, as the case may be, exchange for further Coupons shall be made in respect thereof. A “Long Maturity Note” is a Fixed Rate Note (other than a Fixed Rate Note which on issue had a Talon attached) whose nominal amount on issue is less than the aggregate interest payable thereon provided that such Note shall cease to be a Long Maturity Note on the Interest Payment Date on which the aggregate amount of interest remaining to be paid after that date is less than the nominal amount of such Note.

If the due date for redemption of any interest-bearing Definitive Notes is not an Interest Payment Date, interest (if any) accrued in respect of such Note from (and including) the preceding Interest Payment Date or, as the case may be, the Interest Commencement Date shall be payable only against surrender of the relevant Bearer Definitive Note.

(c) Payments in respect of Bearer Global Notes

Payments of principal and interest (if any) in respect of Ordinary Notes represented by any Bearer Global Note will (subject as provided below) be made in the manner specified above in relation to Bearer Definitive Notes and otherwise in the manner specified in the relevant Bearer Global Note against presentation or surrender, as the case may be, of such Global Note at the specified office of any Paying Agent outside the United States. On the occasion of each payment, (i) in the case of any Global Note which is not issued in new global note (“NGN”) form, a record of such payment made on such Global Note, distinguishing between any payment of principal and any payment of interest, will be made on such Global Note by the Principal Paying Agent, and such record shall be prima facie evidence that the payment in question has been made and (ii) in the case of any Global Note which is a NGN, the Principal Paying Agent shall instruct Euroclear and Clearstream, Luxembourg to make appropriate entries in their records to reflect such payment.

(d) Payments in respect of Registered Notes

Payments of principal in respect of each Registered Note (whether or not in global form) will be made against presentation and surrender (or, in the case of part payment of any sum due, endorsement) of the Registered Note at the specified office of the Registrar or any of the Paying Agents. Such payments will be made by transfer to the Designated Account (as defined below) of the holder (or the first named of joint holders) of the Registered Note appearing in the register of holders of the Registered Notes

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maintained by the Registrar (the “Register”) at the close of business on the third business day (being for this purpose a day on which banks are open for business in the city where the specified office of the Registrar is located) before the relevant due date. Notwithstanding the previous sentence, if (i) a holder does not have a Designated Account or (ii) the principal amount of the Registered Notes held by a holder is less than U.S.$250,000 (or its approximate equivalent in any other Specified Currency), payment will instead be made by a cheque in the Specified Currency drawn on a Designated Bank (as defined below). For these purposes, “Designated Account” means the account maintained by a holder with a Designated Bank and identified as such in the Register and “Designated Bank” means (in the case of payment in a Specified Currency other than euro) a bank in the principal financial centre of the country of such Specified Currency and (in the case of a payment in euro) any bank which processes payments in euro.

Payments of interest and of principal in respect of each Registered Note (whether or not in global form) will be made by a cheque in the Specified Currency drawn on a Designated Bank and mailed by uninsured mail on the business day in the city where the specified office of the Registrar is located immediately preceding the relevant due date to the holder (or the first named of joint holders) of the Registered Note appearing in the Register at the close of the business day (in the ICSDs) prior to the Payment Date (the “Record Date”) at his address shown in the Register on the Record Date and at his risk. Upon application of the holder to the specified office of the Registrar not less than three business days in the city where the specified office of the Registrar is located before the due date for any payment of interest in respect of a Registered Note, the payment may be made by transfer on the due date in the manner provided in the preceding paragraph. Any such application for transfer shall be deemed to relate to all future payments of interest (other than interest due on redemption) and of principal in respect of the Registered Notes which become payable to the holder who has made the initial application until such time as the Registrar is notified in writing to the contrary by such holder. Payment of the interest and principal due in respect of each Registered Note on redemption will be made in the same manner as payment of the principal amount of such Registered Note.

Holders of Registered Notes will not be entitled to any interest or other payment for any delay in receiving any amount due in respect of any Registered Note as a result of a cheque posted in accordance with this Condition 4 arriving after the due date for payment or being lost in the post. No commissions or expenses shall be charged to such holders by the Registrar in respect of any payments of principal or interest in respect of the Registered Notes.

None of the Issuer or the Principal Paying Agents will have any responsibility or liability for any aspect of the records relating to, or payments made on account of, beneficial ownership interests in the Registered Global Notes or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

(e) Specific provisions in relation to payments in respect of certain types of Exempt Notes

Payments of instalments of principal (if any) in respect of definitive Notes, other than the final instalment, will (subject as provided below) be made in the manner provided in Condition 4(a) above only against presentation and surrender (or, in the case of part payment of any sum due, endorsement) of the relevant Receipt in accordance with the preceding paragraph. Payment of the final instalment will be made in the manner provided in Condition 4(d) above only against presentation and surrender (or, in the case of part payment of any sum due, endorsement) of the relevant Note in accordance with the preceding paragraph. Each Receipt must be presented for payment of the relevant instalment together with the definitive Note to which it appertains. Receipts presented without the definitive Note to which they appertain do not constitute valid obligations of the Issuer. Upon the date on which any

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definitive Note becomes due and repayable, unmatured Receipts (if any) relating thereto (whether or not attached) shall become void and no payment shall be made in respect thereof.

Upon the date on which any Dual Currency Note or Index Linked Note in definitive form becomes due and repayable, unmatured Coupons and Talons (if any) relating thereto (whether or not attached) shall become void and no payment or, as the case may be, exchange for further Coupons shall be made in respect thereof.

(f) General provisions applicable to payments

The holder of a Global Note shall be the only person entitled to receive payments in respect of Ordinary Notes represented by such Global Note and the Issuer or, as the case may be will be discharged by payment to, or to the order of, the holder of such Global Note in respect of each amount so paid. Each of the persons shown in the records of Euroclear or Clearstream, Luxembourg as the beneficial holder of a particular nominal amount of Notes represented by such Global Note must look solely to Euroclear or Clearstream, Luxembourg, as the case may be, for his share of each payment so made by the Issuer or, as the case may be to, or to the order of, the holder of such Global Note.

Notwithstanding the foregoing provisions of this Condition, if any amount of principal and/or interest in respect of Bearer Notes is payable in U.S. dollars, such U.S. dollar payments of principal and/or interest in respect of such Notes will be made at the specified office of a Paying Agent in the United States if:

(i) the Issuer has appointed Paying Agents with specified offices outside the United States with the reasonable expectation that such Paying Agents would be able to make payment in U.S. dollars at such specified offices outside the United States of the full amount of principal and interest on the Bearer Notes in the manner provided above when due;

(ii) payment of the full amount of such principal and interest at all such specified offices outside the United States is illegal or effectively precluded by exchange controls or other similar restrictions on the full payment or receipt of principal and interest in U.S. dollars; and

(iii) such payment is then permitted under United States law without involving adverse tax consequences to the Issuer.

(g) Payment Day

If the date for payment of any amount in respect of any Ordinary Note, Receipt or Coupon is not a Payment Day, the holder thereof shall not be entitled to payment of the relevant payment due until the next following Payment Day and shall not be entitled to any interest or other payment in respect of any such delay. For these purposes, “Payment Day” means any day which (subject to Condition 7 below) is:

(i) a day on which commercial banks and foreign exchange markets settle payments and are open for general business (including dealing in foreign exchange and foreign currency deposits) in:

(A) in the case of Ordinary Notes in Definitive Form, the relevant place of presentation; and

(B) any Additional Financial Centre (other than the TARGET 2 System) specified in the applicable Final Terms;

(C) if TARGET2 System is specified as an Additional Financial Centre in the applicable Final Terms, a day on which the TARGET2 System is open; and

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(ii) either (1) in relation to any sum payable in a Specified Currency other than euro, a day on which commercial banks and foreign exchange markets settle payments and are open for general business (including dealing in foreign exchange and foreign currency deposits) in the principal financial centre of the country of the relevant Specified Currency or (2) in relation to any sum payable in euro, a day on which the TARGET2 System is open; and


(h) Interpretation of principal and interest

Any reference in these Ordinary Note Conditions to principal in respect of the Ordinary Notes shall be deemed to include, as applicable:

(i) any additional amounts which may be payable with respect to principal under Condition 6;

(ii) the Final Redemption Amount of the Ordinary Notes;

(iii) the Early Redemption Amount of the Ordinary Notes;

(iv) the Optional Redemption Amount(s) (if any) of the Ordinary Notes;

(v) in relation to Exempt Notes redeemable in instalments, the Instalment Amounts;

(vi) in relation to Zero Coupon Notes, the Amortised Face Amount (as defined in Condition 5(e)); and

(vii) any premium and any other amounts (other than interest) which may be payable by the Issuer under or in respect of the Ordinary Notes.

Any reference in these Terms and Conditions to interest in respect of the Notes shall be deemed to include, as applicable, any additional amounts which may be payable with respect to interest under Condition 5.

5 Redemption and Purchase

(a) Redemption at maturity

Unless previously redeemed or purchased and cancelled as specified below, each Ordinary Note will be redeemed by the Issuer at its Final Redemption Amount (which shall be at least equal to the Nominal Amount of each Note) specified in, the applicable Final Terms in the relevant Specified Currency on the Maturity Date.

(b) Redemption at the option of the Issuer (Issuer Call)

Subject in the case of Subordinated Notes, to obtaining the prior written consent of the FSAN as provided in Condition 5(j), if Issuer Call is specified in the applicable Final Terms, the Issuer may, having given:

(i) not less than 15 nor more than 30 days’ notice to the Ordinary Noteholders in accordance with Condition 13 below; and

(ii) not less than 15 days before the giving of the notice referred to in (i), notice to the Principal Paying Agent, and to the Registrar,

(which notices shall be irrevocable and shall specify the date fixed for redemption), redeem all or some only of the Ordinary Notes then outstanding on any Optional Redemption Date and at the Optional

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Redemption Amount(s) specified in, the applicable Final Terms together, if appropriate, with interest accrued to (but excluding) the relevant Optional Redemption Date. Any such redemption must be of a nominal amount not less than the Minimum Redemption Amount or not more than a Maximum Redemption Amount, in each case as may be specified in the applicable Final Terms. In the case of a partial redemption of Ordinary Notes, the Ordinary Notes to be redeemed (“Redeemed Notes”) will be selected individually by lot, in the case of Redeemed Notes represented by definitive Ordinary Notes, and in accordance with the rules of Euroclear and/or Clearstream, Luxembourg, (to be reflected in the records of Euroclear and Clearstream, Luxembourg as either a pool factor or a reduction in nominal amount, at their discretion) in the case of Redeemed Notes represented by a Global Note, not more than 30 days prior to the date fixed for redemption (such date of selection being hereinafter called the “Selection Date”). In the case of Redeemed Notes represented by definitive Ordinary Notes, a list of the serial numbers of such Redeemed Notes will be published in accordance with Condition 13 not less than 15 days prior to the date fixed for redemption. No exchange of the relevant Global Note will be permitted during the period from (and including) the Selection Date to (and including) the date fixed for redemption pursuant to this Condition 5(b) and notice to that effect shall be given by the Issuer to the Ordinary Noteholders in accordance with Condition 13 at least five days prior to the Selection Date.

(c) Redemption for Taxation Reasons

Subject, in the case of Subordinated Notes, as provided in Condition 5(j), the Ordinary Notes may be redeemed at the option of the Issuer in whole, but not in part, at any time (if the Ordinary Note is not a Floating Rate Note) or on any Interest Payment Date, (if the Ordinary Note is a Floating Rate Note), on giving not less than 30 nor more than 60 days’ notice to the Ordinary Noteholders (which notice shall be irrevocable), if:

(i) on the occasion of the next payment due under the Ordinary Notes, the Issuer has or will become obliged to pay additional amounts as provided or referred to in Condition 6 as a result of any change in, or amendment to, the laws or regulations of the Kingdom of Norway or any authority therein having power to tax or any political subdivision thereof, or any change in the application or official interpretation of such laws or regulations, which change or amendment becomes effective on or after the date on which agreement is reached to issue the first Tranche of the Ordinary Notes;

(ii) such obligation cannot be avoided by the Issuer taking reasonable measures available to it; and

(iii) in the case of Subordinated Notes, the effect of such obligation is material on the Issuer,

provided that no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which the Issuer would be obliged to pay such additional amounts were a payment in respect of the Ordinary Notes then due

Prior to the publication of any notice of redemption pursuant to this Condition 5(c), the Issuer shall deliver to the Principal Paying Agents to make available to the Ordinary Noteholders (i) a certificate signed by two directors of the Issuer stating that the Issuer is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of the Issuer so to redeem have occurred, and (ii) an opinion of independent legal advisers of recognised standing to the effect that the Issuer has or will become obliged to pay such additional amounts as a result of such change or amendment.

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Notes redeemed pursuant to this Condition 5(c) will be redeemed at their Early Redemption Amount referred to in paragraph (e) below together (if appropriate) with interest accrued to (but excluding) the date of redemption.

(d) Redemption at the option of the Ordinary Noteholders (Investor Put)

Subject, in the case of Subordinated Notes, to obtaining prior written consent of the FSAN, as provided in Condition 5(j), if Investor Put is specified in the applicable Final Terms, upon any Ordinary Noteholder giving to the Issuer in accordance with Condition 13 below not less than 15 nor more than 30 days’ notice the Issuer will, upon the expiry of such notice, redeem, subject to, and in accordance with, the terms specified in the applicable Final Terms, such Note on the Optional Redemption Date and at the Early Redemption Amount together, if appropriate, with interest accrued to (but excluding) the Optional Redemption Date.

To exercise the right to require redemption of this Ordinary Note the holder of this Ordinary Note must deliver, at the specified office of any Paying Agent, in the case of Bearer Notes, or any Transfer Agent or the Registrar in the case of Registered Notes at any time during normal business hours of such Paying Agent or the Transfer Agent or the Registrar falling within the notice period, accompanied by a duly completed and signed notice of exercise in the form (for the time being current) obtainable from any specified office of any Paying Agent or the Transfer Agent or the Registrar (a “Put Notice”) and in which the holder must specify a bank account (or, if payment is required to be made by cheque, an address) to which payment is to be made under this Condition. If this Ordinary Note is in definitive form, this Ordinary Note or evidence satisfactory to the Paying Agent, Transfer Agent or the Registrar concerned that this Ordinary Note will, following delivery of the Put Notice, be held to its order or under its control.

Any Put Notice given by a holder of any Ordinary Note pursuant to this paragraph shall be irrevocable except where prior to the due date of redemption an Event of Default shall have occurred and be continuing in which event such holder, at its option, may elect by notice to the Issuer to withdraw the notice given pursuant to this paragraph and instead to declare such Note forthwith due and payable pursuant to Condition 8.

(e) Early Redemption Amounts

For the purpose of paragraphs (d) and (c) above and Condition 8:

(i) Each Ordinary Note (other than a Zero Coupon Note) will be redeemed at its Early Redemption Amount; and

(ii) each Zero Coupon Note will be redeemed at an amount (the “Amortised Face Amount”) calculated in accordance with the following formula:

where:

“RP” means the Reference Price;

“AY” means the Accrual Yield expressed as a decimal; and

“y” is the Day Count Fraction specified in the applicable Final Terms which will be either (i) 30/360 (in which case the numerator will be equal to the number of days (calculated on the basis of a 360-day year consisting of 12 months of 30 days each) from (and including) the Issue Date of the first Tranche of the Notes to (but excluding) the date fixed for redemption or (as the

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case may be) the date upon which such Note becomes due and repayable and the denominator will be 360) or (ii) Actual/360 (in which case the numerator will be equal to the actual number of days from (and including) the Issue Date of the first Tranche of the Notes to (but excluding) the date fixed for redemption or (as the case may be) the date upon which such Note becomes due and repayable and the denominator will be 360) or (iii) Actual/365 (in which case the numerator will be equal to the actual number of days from (and including) the Issue Date of the first Tranche of the Notes to (but excluding) the date fixed for redemption or (as the case may be) the date upon which such Note becomes due and repayable and the denominator will be 365.

(f) Specific redemption provisions applicable to certain types of Exempt Notes

The Final Redemption Amount, any Optional Redemption Amount and the Early Redemption Amount in respect of Index Linked Redemption Notes and Dual Currency Redemption Notes may be specified in, or determined in the manner specified in, the applicable Pricing Supplement. For the purposes of Condition 5(b), Index Linked Interest Notes and Dual Currency Interest Notes may be redeemed only on an Interest Payment Date.

Instalment Notes will be redeemed in the Instalment Amounts and on the Instalment Dates specified in the applicable Pricing Supplement. In the case of early redemption, the Early Redemption Amount of Instalment Notes will be determined in the manner specified in the applicable Pricing Supplement.

Partly Paid Notes will be redeemed, whether at maturity, early redemption or otherwise, in accordance with the provisions of this Condition and the applicable Pricing Supplement.

(g) Purchases

Subject, in the case of Subordinated Notes, as provided in Condition 5(j), the Issuer or any Subsidiary (as defined in Condition 8(a)) of the Issuer may at any time purchase Ordinary Notes (provided that, in the case of Bearer Definitive Notes, all unmatured Coupons, Receipts and Talons appertaining thereto are purchased therewith) at any price in the open market or otherwise. Such Ordinary Notes may be held, reissued, resold or, at the option of the Issuer, surrendered to any Paying Agent and/or the Registrar for cancellation.

(h) Cancellation

All Ordinary Notes which are redeemed will forthwith be cancelled (together with, in the case of Bearer Definitive Notes, all unmatured Receipts, Coupons and Talons attached thereto or surrendered therewith at the time of redemption). All Ordinary Notes so cancelled and any Ordinary Notes purchased and cancelled pursuant to paragraph (e) above (together with, in the case of Bearer Definitive Notes, all unmatured Receipts, Coupons and Talons cancelled therewith) shall be forwarded to the Principal Paying Agent and cannot be reissued or resold.

(i) Late payment on Zero Coupon Notes

If the amount payable in respect of any Zero Coupon Note upon redemption of such Zero Coupon Note pursuant to paragraph (a), (b), (c) or (d) above or upon its becoming due and repayable as provided in Condition 8 is improperly withheld or refused, the amount due and repayable in respect of such Zero Coupon Note shall be the amount calculated as provided in paragraph (e)(ii) above as though the references therein to the date fixed for the redemption or the date upon which such Zero Coupon Note becomes due and payable were replaced by references to the date which is the earlier of:

(i) the date on which all amounts due in respect of such Zero Coupon Note have been paid; and

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(ii) five days after the date on which the full amount of the moneys payable in respect of such Zero Coupon Notes has been received by the Principal Paying Agent and notice to that effect has been given to the Noteholders in accordance with Condition 13.

(j) Consent

In the case of Subordinated Notes, no early redemption in any circumstances or purchase under Condition 5(g) shall take place without the prior written consent of the FSAN. For the avoidance of doubt, redemption of Subordinated Notes under Condition 5(a) shall not require the consent of the FSAN.

(k) Redemption of Subordinated Notes upon Capital Event

If a Capital Event occurs, the Issuer may, at its option, but subject to obtaining the prior written consent of the FSAN as provided in Condition 5(j), on giving not less than 30 nor more than 60 days’ notice to the Principal Paying Agent and, in accordance with Condition 13, the Noteholders (which notice shall be irrevocable), on any Interest Payment Date redeem all (but not some only) of the Notes at an amount specified in the applicable Final Terms, together with interest accrued to (but excluding) the date of redemption. Upon the expiry of such notice, the Issuer shall redeem the Subordinated Notes.

6 Taxation

(a) Gross-up

Subject as provided in Condition 6(b) (for the purposes of Subordinated Notes only), all payments of principal and interest in respect of the Ordinary Notes Receipts and Coupons by the Issuer will be made without withholding or deduction for or on account of any present or future taxes or duties of whatever nature imposed or levied by or on behalf of the Kingdom of Norway or any political subdivision or any authority thereof or therein having power to tax unless such withholding or deduction is required by law. In that event, the Issuer shall pay such additional amounts as shall result in receipt by the Ordinary Noteholders, the Receiptholders and the Couponholders of such amounts as would have been received by them had no such withholding or deduction been required, except that no such additional amounts shall be payable with respect to any Ordinary Note, Receipt or Coupon:

(i) Other connection: to, or to a third party on behalf of, a holder who is liable to such taxes, duties, assessments or governmental charges in respect of such Ordinary Note, Receipt or Coupon by reason of his having some connection with the Kingdom of Norway other than the mere holding of the Ordinary Note, Receipt or Coupon or

(ii) Presentation more than 30 days after the Relevant Date: presented for payment more than 30 days after the Relevant Date except to the extent that the holder of it would have been entitled to such additional amounts on presenting it for payment on the thirtieth such day.

As used in these Ordinary Note Conditions, “Relevant Date” in respect of any Ordinary Note, Receipt or Coupon means the date on which payment in respect of it first becomes due or (if any amount of the money payable is improperly withheld or refused) the date on which payment in full of the amount outstanding is made or (if earlier) the date seven days after that on which notice is duly given to the Ordinary Noteholders that, upon further presentation of the Ordinary Note, Receipt or Coupon being made in accordance with the Ordinary Note Conditions, such payment will be made, provided that payment is in fact made upon such presentation.

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Notwithstanding any other provision of the terms and conditions of the Notes, any amounts to be paid by or on behalf of the Issuer on the Notes will be paid net of any deduction or withholding imposed or required pursuant to Sections 1471 through 1474 of the U.S. Internal Revenue Code (the “Code”), as amended, any current or future regulations or official interpretations thereof, any agreement entered into pursuant to Section 1471(b) of the Code, or an intergovernmental agreement between the United States and another jurisdiction facilitating the implementation of Sections 1471 through 1474 of the Code (or any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement) (any such withholding or deduction, a “FATCA Withholding Tax”). None of the Issuer or any other person will be required to pay additional amounts on account of any FATCA Withholding Tax.

(b) Subordinated Notes

This Condition 6(b) shall only apply to Subordinated Notes. Notwithstanding Condition 6(a), the Issuer’s obligation to pay additional amounts will be limited to payments of interest in respect of Subordinated Notes.

7 Prescription

The Ordinary Notes (whether in bearer or registered form), Receipts and Coupons will become void unless presented for payment within a period of 10 years (in the case of principal) and five years (in the case of interest) after the Relevant Date (as defined in Condition 18 below) in respect thereof.

There shall not be included in any Coupon sheet issued on exchange of a Talon any Coupon the claim for payment in respect of which would be void pursuant to this Condition 7 or Condition 4(b) above or any Talon which would be void pursuant to Condition 4(b) above.

8 Events of Default

(a) Events of Default relating to Unsubordinated Notes

This Condition 8(a) only applies to Unsubordinated Notes. If any one or more of the following events (each an “Event of Default”) shall occur and be continuing with respect to any Unsubordinated Note:

(i) if default is made in the payment in the Specified Currency of any principal or interest due in respect of the Ordinary Notes or any of them and in the case of interest that default continues for a period of seven days; or

(ii) if the Issuer fails to perform or observe any of its other obligations under these Ordinary Note Conditions and (except in any case where the failure is incapable of remedy when no such continuation or notice as is hereinafter mentioned will be required) the failure continues for the period of 30 days next following the service by a Noteholder on the Issuer of notice requiring the same to be remedied; or

(iii) any payment obligation under any indebtedness (including deposits) of the Issuer or any of its Principal Subsidiaries becomes due and repayable prematurely by reason of an event of default (howsoever described) or the Issuer or any of its Principal Subsidiaries fails to make any payment in respect of any indebtedness (including deposits) within 30 days of the due date for payment (or within the originally applicable grace period, if such period is longer than 30 days) or any security given by the Issuer or any of its Principal Subsidiaries for any indebtedness (including deposits) becomes enforceable or if default is made by the Issuer or any of its Principal Subsidiaries in making any payment due under any guarantee and/or indemnity given

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by it in relation to any obligation of any other person for 30 days (or within the originally applicable grace period, if such period is longer than 30 days), PROVIDED that no such event shall constitute an Event of Default unless the indebtedness (including deposits) or other relative liability either alone or when aggregated with other indebtedness (including deposits) and/or liabilities relating to all (if any) other events which shall have occurred and be outstanding shall amount to at least €10,000,000 (or its equivalent in any other currency) and PROVIDED further that, for the purposes of this Condition 8(a)(iii), neither the Issuer nor any of its Principal Subsidiaries shall be deemed to be in default with respect to any such indebtedness (including deposits), guarantee or indemnity if it shall be contesting in good faith by appropriate means its liability to make payment thereunder; or

(iv) if any order is made by any competent court or resolution passed for the winding up or dissolution of the Issuer or any of its Principal Subsidiaries, save for the purposes of reorganisation on terms approved by an Extraordinary Resolution (as defined in the Agency Agreement) of the Noteholders; or

(v) if the Issuer or any of its Principal Subsidiaries ceases or threatens to cease to carry on the whole or a substantial part of its business, save for the purposes of reorganisation on a solvent basis, or the Issuer or any of its Principal Subsidiaries stops or threatens to stop payment of, or is unable to, or admits inability to, pay, its debts (or any class of its debts) as they fall due, or is deemed unable to pay its debts pursuant to or for the purposes of any applicable law, or is adjudicated or found bankrupt or insolvent; or

(vi) if (A) proceedings are initiated against the Issuer or any of its Principal Subsidiaries under any applicable liquidation, insolvency, composition, reorganisation or other similar laws, or an application is made for the appointment of an administrative or other receiver, manager, administrator or other similar official, or an administrative or other receiver, manager, administrator or other similar official is appointed, in relation to the Issuer or any of its Principal Subsidiaries or, as the case may be, in relation to the whole or a substantial part of the undertaking or assets of any of them, or an encumbrancer takes possession of the whole or a substantial part of the undertaking or assets of any of them, or a distress, execution, attachment, sequestration or other process is levied, enforced upon, sued out or put in force against the whole or a substantial part of the undertaking or assets of any of them and (B) in any case (other than the appointment of an administrator) is not discharged within l4 days; or

(vii) if the Issuer or any of its Principal Subsidiaries initiates or consents to judicial proceedings relating to itself under any applicable liquidation, insolvency, composition, reorganisation or other similar laws or makes a conveyance or assignment for the benefit of, or enters into any composition or other arrangement with, its creditors generally (or any class of its creditors) or any meeting is convened to consider a proposal for an arrangement or composition with its creditors generally (or any class of its creditors),

then any holder of an Unsubordinated Note may, by written notice to the Issuer at the specified office of the Principal Paying Agent, effective upon the date of receipt thereof by the Principal Paying Agent, declare any Unsubordinated Notes held by the holder to be forthwith due and payable whereupon the same shall become forthwith due and payable at the Early Redemption Amount (as described in Condition 5(e)), together with accrued interest (if any) to the date of repayment, without presentment, demand, protest or other notice of any kind.

For the purpose of these Conditions:

“Principal Subsidiary” at any time shall mean a Subsidiary of the Issuer inter alia:

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(A) whose gross revenues attributable to the Issuer (consolidated in the case of a Subsidiary which itself has Subsidiaries) or whose total assets (consolidated in the case of a Subsidiary which itself has Subsidiaries) represent not less than 5 per cent. of the consolidated gross revenues attributable to the shareholders of the Issuer, or, as the case may be, consolidated total assets, of the Issuer and its Subsidiaries taken as a whole, all as calculated respectively by reference to the then latest audited accounts (consolidated or, as the case may be, unconsolidated) of the Subsidiary and the then latest audited consolidated accounts of the Issuer and its Subsidiaries; or

(B) to which is transferred the whole or substantially the whole of the undertaking and assets of a Subsidiary of the Issuer which immediately before the transfer is a Principal Subsidiary,

all as more particularly defined in the Agency Agreement.

A report by the Directors of the Issuer that in their opinion a Subsidiary of the Issuer is/was or is/was not at any particular time or throughout any specified period, a Principal Subsidiary, accompanied, if requested, by a report by the Auditors (as defined in the Agency Agreement) addressed to the Directors of the Issuer as to proper extraction of the figures used by the Directors of the Issuer in determining the Principal Subsidiaries of the Issuer and mathematical accuracy of the calculations, shall, in the absence of manifest error, be conclusive and binding on all parties; and

“Subsidiary” means any legal entity in which the Issuer either (i) directly or indirectly owns or controls more than 50 per cent. of the entity’s shares and votes, or (ii) is entitled to appoint or remove a majority of the entity’s directors.

(b) Events of Default relating to Subordinated Notes

There are no events of default in relation to Subordinated Notes.

9 Replacement of Notes, Receipts, Coupons and Talons

Should any Ordinary Note, Receipt, Coupon or Talon be lost, stolen, mutilated, defaced or destroyed, it may be replaced at the specified office of the Principal Paying Agent in London (in the case of Bearer Notes, Receipts, Coupons or Talons) or the Registrar (in the case of Registered Notes) upon payment by the claimant of such costs and expenses as may be incurred in connection therewith and on such terms as to evidence and indemnity as the Issuer may reasonably require. Mutilated or defaced Ordinary Notes, Receipts, Coupons or Talons must be surrendered before replacements will be issued.

10 Transfer and Exchange of Registered Notes

(a) Transfers of interests in Registered Global Notes

Transfers of beneficial interests in Registered Global Notes will be effected by Euroclear or Clearstream, Luxembourg, as the case may be, and, in turn, by other participants and, if appropriate, indirect participants in such clearing systems acting on behalf of beneficial transferors and transferees of such interests. A beneficial interest in a Registered Global Note will, subject to compliance with all applicable legal and regulatory restrictions, be transferable for Registered Definitive Notes or for a beneficial interest in another Registered Global Note only in the Specified Denominations set out in the applicable Final Terms and only in accordance with the rules and operating procedures for the time being of Euroclear or Clearstream, Luxembourg, as the case may be, and in accordance with the terms and conditions specified in the Agency Agreement.

(b) Transfers of Registered Notes in definitive form

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Upon the terms and subject to the conditions set forth in the Agency Agreement, a Registered Definitive Note may be transferred in whole or in part (in the Specified Denominations set out in the applicable Final Terms). In order to effect any such transfer (i) the holder or holders must (A) surrender the Registered Note for registration of the transfer of the Registered Note (or the relevant part of the Registered Note) at the specified office of the Registrar or any Transfer Agent, with the form of transfer thereon duly executed by the holder or holders thereof or his or their attorney or attorneys duly authorised in writing and (B) complete and deposit such other certifications as may be required by the Registrar or, as the case may be, the relevant Transfer Agent and (ii) the Registrar or, as the case may be, the relevant Transfer Agent must, after due and careful enquiry, be satisfied with the documents of title and the identity of the person making the request.

Any such transfer will be subject to such reasonable regulations as the Issuer and the Registrar may from time to time prescribe (the initial such regulations being set out in Schedule 10 to the Agency Agreement).

Subject as provided above, the Registrar or, as the case may be, the relevant Transfer Agent will, within three business days (being for this purpose a day on which banks are open for business in the city where the specified office of the Registrar or, as the case may be, the relevant Transfer Agent is located) of the request (or such longer period as may be required to comply with any applicable fiscal or other laws or regulations), authenticate and deliver, or procure the authentication and delivery of, at its specified office to the transferee or (at the risk of the transferee) send by uninsured mail, to such address as the transferee may request, a new Registered Definitive Note of a like aggregate nominal amount to the Registered Note (or the relevant part of the Registered Note) transferred. In the case of the transfer of part only of a Registered Definitive Note, a new Registered Definitive Note in respect of the balance of the Registered Note not transferred will be so authenticated and delivered or (at the risk of the transferor) sent by uninsured mail to the address specified by the transferor.

(c) Registration of transfer upon partial redemption

In the event of a partial redemption of Ordinary Notes under Condition 5 above, the Issuer shall not be required to register the transfer of any Registered Note, or part of a Registered Note, called for partial redemption.

(d) Costs of registration

Noteholders of Registered Notes will not be required to bear the costs and expenses of effecting any registration of transfer as provided above, except for any costs or expenses of delivery other than by regular uninsured mail and except that the Issuer may require the payment of a sum sufficient to cover any stamp duty, tax or other governmental charge that may be imposed in relation to the registration.

11 Paying Agents, Transfer Agent, Calculation Agent and Registrar

The names of the initial Principal Paying Agent, the initial Registrar and the other initial Paying Agents, and initial Transfer Agents and their initial specified offices are set out below.

The Issuer is entitled to vary or terminate the appointment of any Paying Agent or the Registrar or any Transfer Agent or any Calculation Agent and/or appoint additional or other Paying Agents or additional or other Registrars, Transfer Agents, or Calculation Agents and/or approve any change in the specified office through which any Paying Agent, Registrar, Transfer Agent, or Calculation Agent acts, provided that:

(a) so long as the Ordinary Notes are listed on any stock exchange or admitted to listing by any other relevant authority there will at all times be a Paying Agent (which may be the Principal Paying Agent),

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in the case of Bearer Notes, and a Transfer Agent (which may be the Registrar), in the case of Registered Notes, with a specified office in such place as may be required by the rules and regulations of such stock exchange or other relevant authority;

(b) there will at all times be a Paying Agent (which may be the Principal Paying Agent) with a specified office in a city in continental Europe outside Norway;

(c) there will at all times be a Transfer Agent having a specified office in a place approved by the Issuer; and

(d) there will at all times be a Registrar with a specified office outside the United Kingdom and, so long as the Ordinary Notes are listed on any stock exchange, in such place as may be required by the rules and regulations of the relevant stock exchange.

In addition, the Issuer shall forthwith appoint a Paying Agent having a specified office in New York City in the circumstances described in Condition 4(f) above. Any variation, termination, appointment or change shall only take effect (other than in the case of insolvency, when it shall be of immediate effect) after not less than 30 nor more than 45 days’ prior notice thereof shall have been given to the Ordinary Noteholders in accordance with Condition 13 below.

In acting under the Agency Agreement, the Paying Agents act solely as agents of the Issuer and do not assume any obligation to, or relationship of agency or trust with, any Ordinary Noteholders, Receiptholders or Couponholders. The Agency Agreement contains provisions permitting any entity into which any Paying Agent is merged or converted or with which it is consolidated or to which it transfers all or substantially all of its assets to become the successor paying agent.

12 Exchange of Talons

On and after the Interest Payment Date on which the final Coupon comprised in any Coupon sheet matures, the Talon (if any) forming part of such Coupon sheet may be surrendered at the specified office of the Principal Paying Agent or any other Paying Agent in exchange for a further Coupon sheet including (if such further Coupon sheet does not include Coupons to (and including) the final date for the payment of interest due in respect of the Note to which it appertains) a further Talon, subject to the provisions of Condition 7 above.

13 Notices

All notices regarding the Bearer Notes will be deemed to be validly given if published (i) in a leading English language daily newspaper of general circulation in London, and (ii) if and for so long as the Ordinary Notes are listed on the Luxembourg Stock Exchange, a daily newspaper of general circulation in Luxembourg and on the website of the Luxembourg Stock Exchange (www.bourse.lu). It is expected that such publication will be made in the Financial Times in London and the Luxemburger Wort in Luxembourg. The Issuer shall also ensure that notices are duly published in a manner which complies with the rules and regulations of any stock exchange (or any other relevant authority) on which any Bearer Notes are for the time being listed or by which they have been admitted to trading. Any such notice will be deemed to have been given on the date of the first publication or, where required to be published in more than one newspaper, on the date of the first publication in all required newspapers.

All notices regarding the Registered Notes will be deemed to be validly given if sent by first class mail or (if posted to an address overseas) by airmail to the holders (or the first named of joint holders) at their respective addresses recorded in the Register and will be deemed to have been given on the fourth day after mailing and, in addition, for so long as any Registered Notes are listed on a stock exchange or are admitted to trading by

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another relevant authority and the rules of that stock exchange or relevant authority so require, such notice will be published in a daily newspaper of general circulation in the place or places required by those rules.

Until such time as any Definitive Notes are issued, there may, so long as any Global Notes representing the Ordinary Notes are held in their entirety on behalf of Euroclear and/or Clearstream, Luxembourg, be substituted for such publication in such newspaper(s) and such notice by mail in connection with the Registered Notes the delivery of the relevant notice to Euroclear and/or Clearstream, Luxembourg for communication by them to the holders of the Notes and, in addition, for so long as any Ordinary Notes are listed on a stock exchange or are admitted to trading by another relevant authority and the rules of that stock exchange (or any other relevant authority) so require, such notice will be published in a daily newspaper of general circulation in the place or places required by the rules of that stock exchange (or any other relevant authority). Any such notice shall be deemed to have been given to the holders of such Notes on the day after the day on which the said notice was given to Euroclear and/or Clearstream, Luxembourg.

Notices to be given by any Ordinary Noteholder shall be in writing and given by lodging the same, together (in the case of any Ordinary Note in definitive form) with the relevant Ordinary Note or Ordinary Notes, with the Principal Paying Agent (in the case of Bearer Notes) or the Registrar (in the case of Registered Notes). Whilst any of the Ordinary Notes are represented by a Global Note, such notice may be given by any holder of an Ordinary Note to the Principal Paying Agent or the Registrar through Euroclear and/or Clearstream, Luxembourg as the case may be, in such manner as the Principal Paying Agent and Euroclear and/or Clearstream, Luxembourg as the case may be, may approve for this purpose.

14 Meetings of Ordinary Noteholders, Modification and Waiver

(a) Provisions with respect to Holders of Bearer Notes and/or Registered Notes

The Agency Agreement contains provisions for convening meetings of the Ordinary Noteholders to consider any matter affecting their interests, including the sanctioning by Extraordinary Resolution of a modification of the Ordinary Notes, the Receipts, the Coupons or any of the provisions of the Agency Agreement. Such a meeting may be convened by the Issuer or Ordinary Noteholders holding not less than five per cent. in nominal amount of the Ordinary Notes for the time being remaining outstanding. The quorum at any such meeting for passing an Extraordinary Resolution is one or more persons holding or representing not less than 50 per cent. in nominal amount of the Ordinary Notes for the time being outstanding, or at any adjourned meeting one or more persons being or representing Ordinary Noteholders whatever the nominal amount of the Ordinary Notes so held or represented, except that at any meeting the business of which includes the modification of certain provisions of the Ordinary Notes, the Receipts or the Coupons (including modifying the date of maturity of the Ordinary Notes or any date for payment of interest thereon, reducing or cancelling the amount of principal or the rate of interest payable in respect of the Ordinary Notes or altering the currency of payment of the Ordinary Notes, the Receipts or the Coupons), the quorum shall be one or more persons holding or representing not less than two-thirds in nominal amount of the Ordinary Notes for the time being outstanding, or at any adjourned such meeting one or more persons holding or representing not less than one-third in nominal amount of the Ordinary Notes for the time being outstanding. An Extraordinary Resolution passed at any meeting of the Ordinary Noteholders (or as described in the following paragraph) shall be binding on all the Ordinary Noteholders, whether or not they are present at the meeting (or whether or not they participated as provided in the following paragraph, as the case may be), and on all Receiptholders and Couponholders.

The Agency Agreement provides that a resolution (a) in writing signed by or on behalf of the holders of not less than 75 per cent. in nominal amount of the Ordinary Notes outstanding or (b) by way of

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electronic consents communicated through the electronic communications systems of the relevant clearing system(s) by or on behalf of the holders of not less than 75 per cent. in nominal amount of the Ordinary Notes outstanding shall for all purposes be as valid and effective as an Extraordinary Resolution passed at a meeting of Ordinary Noteholders duly convened and held. A resolution in writing may be contained in one document or several documents in like form, each signed by or on behalf of one or more Ordinary Noteholders.

(b) Modification

The Principal Paying Agent and the Issuer may agree, without the consent of the Ordinary Noteholders, Receiptholders or Couponholders, to:

(i) any modification (except as mentioned above) of the Ordinary Notes, the Receipts, the Coupons, the Agency Agreement or the Deed of Covenant which, in the opinion of the Issuer, is not prejudicial to the interests of the Ordinary Noteholders; or

(ii) any modification of the Ordinary Notes, the Receipts, the Coupons, the Agency Agreement or the Deed of Covenant which is:

(A) of a formal, minor or technical nature;

(B) is made to correct a manifest or proven error; or

(C) is made to comply with mandatory provisions of the law.

Any such modification shall be binding on the Ordinary Noteholders, the Receiptholders and the Couponholders and any such modification shall be notified to the Ordinary Noteholders in accordance with Condition 13 above as soon as practicable thereafter.

15 Further Issues

The Issuer shall be at liberty from time to time without the consent of the Ordinary Noteholders, the Receiptholders or the Couponholders to create and issue further notes having terms and conditions the same as the Ordinary Notes or the same in all respects save for the amount and date of the first payment of interest thereon and the date from which interest starts to accrue and so that the same shall be consolidated and form a single Series with the outstanding Ordinary Notes.

16 Contracts (Rights of Third Parties) Act 1999

No rights are conferred on any person under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Ordinary Note, but this does not affect any right or remedy of any person which exists or is available apart from the Contracts (Rights of Third Parties) Act 1999.

17 Governing Law and Submission to Jurisdiction

(a) Governing law

The Agency Agreement, the Deed of Covenant, the Ordinary Notes (except for Condition 2(b) above) and the Coupons and any non-contractual obligations arising out of or in connection with any of them are governed by, and shall be construed in accordance with, English law. Condition 2(b) above is governed by and shall be construed in accordance with Norwegian law.

(b) Submission to jurisdiction

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The Issuer agrees, for the exclusive benefit of the Paying Agents, Ordinary Noteholders, the Receiptholders and the Couponholders, that the courts of England and Wales are to have jurisdiction to settle any disputes which may arise out of or in connection with the Ordinary Notes, the Receipts and/or the Coupons (including a dispute relating to any non-contractual obligations arising out of or in connection with the Ordinary Notes, the Receipts and/or the Coupons) and that accordingly any suit, action or proceedings (together referred to as “Proceedings”) arising out of or in connection with the Agency Agreement, the Deed of Covenant, the Ordinary Notes, the Receipts and the Coupons (including any Proceedings relating to any non-contractual obligations arising out of or in connection with the Agency Agreement, the Deed of Covenant, the Ordinary Notes, the Receipts and the Coupons) may be brought in such courts.

The Issuer hereby irrevocably waives any objection which it may have now or hereafter to the laying of the venue of any such Proceedings in any such court and any claim that any such Proceedings have been brought in an inconvenient forum and hereby further irrevocably agrees that a judgment in any such Proceedings brought in the English courts shall be conclusive and binding upon it and may be enforced in the courts of any other jurisdiction.

Nothing contained in this Condition 17 shall limit any right to take Proceedings against the Issuer in any other court of competent jurisdiction, nor shall the taking of Proceedings in one or more jurisdictions preclude the taking of Proceedings in any other jurisdiction, whether concurrently or not.

(c) Notwithstanding and to the exclusion of any other term of the Notes or any other agreements, arrangements or understanding between the Issuer and any Noteholder (which, for the purposes of this Condition 17(c), includes each holder of a beneficial interest in the Notes), by its acquisition of the Notes, each Noteholder acknowledges and accepts that any liability arising under the Notes may be subject to the exercise of Norwegian Statutory Loss Absorption Powers by the Relevant Resolution Authority and acknowledges, accepts, consents to and agrees to be bound by:

(i) the effect of the exercise of any Norwegian Statutory Loss Absorption Powers by the Relevant Resolution Authority, which exercise (without limitation) may include and result in any of the following, or a combination thereof:

(A) the reduction of all, or a portion, of the Relevant Amounts in respect of the Notes;

(B) the conversion of all, or a portion, of the Relevant Amounts in respect of the Notes into shares, other securities or other obligations of the Issuer or another person, and the issue to or conferral on the Noteholder of such shares, securities or obligations, including by means of an amendment, modification or variation of the terms of the Notes;

(C) the cancellation of the Notes or the Relevant Amounts in respect of the Notes; and

(D) the amendment or alteration of the perpetual nature of the Notes or amendment of the amount of interest payable on the Notes, or the date on which interest becomes payable, including by suspending payment for a temporary period; and

(ii) the variation of the terms of the Notes, as deemed necessary by the Relevant Resolution Authority, to give effect to the exercise of any Norwegian Statutory Loss Absorption Powers by the Relevant Resolution Authority.

In this Condition 17(c):

“Norwegian Statutory Loss Absorption Powers” means any write-down, conversion, transfer, modification, suspension or similar or related power existing from time to time under, and exercised in compliance with, any laws, regulations, rules or requirements in effect in the Kingdom of Norway,

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relating to (i) the transposition into Norwegian law of Directive 2014/59/EU as amended or replaced from time to time and (ii) the instruments, rules and standards created thereunder, pursuant to which any obligation of the Issuer (or any affiliate of the Issuer) can be reduced, cancelled, modified, or converted into shares, other securities or other obligations of the Issuer or any other person (or suspended for a temporary period);

“Relevant Amounts” means the outstanding principal amount of the Notes, together with any accrued but unpaid interest and additional amounts due on the Notes. References to such amounts will include amounts that have become due and payable, but which have not been paid, prior to the exercise of any Norwegian Statutory Loss Absorption Powers by the Relevant Resolution Authority; and

“Relevant Resolution Authority” means the resolution authority with the ability to exercise any Norwegian Statutory Loss Absorption Powers in relation to the Issuer.

(d) Appointment of Process Agent in England

The Issuer appoints Hackwood Secretaries Limited at its registered office at One Silk Street, London, EC2Y 8HQ, England as its agent for service of process in England, and undertakes that, in the event of Hackwood Secretaries Limited ceasing so to act or ceasing to be registered in England, it will appoint another person as its agent for service of process in England in respect of any Proceedings. Nothing herein shall affect the right to serve proceedings in any other manner permitted by law.

18 Definitions

In these Ordinary Note Conditions, the following words shall have the following meanings:

“Applicable Banking Regulations” means at any time the laws, regulations, requirements, guidelines and policies relating to capital adequacy then in effect in Norway including, without limitation to the generality of the foregoing, those regulations, requirements, guidelines and policies relating to capital adequacy adopted by a governmental authority from time to time and then in effect (whether or not such requirements, guidelines or policies have the force of law and whether or not they are applied generally or specifically to the Issuer or to the Issuer and its subsidiaries);

“Calculation Agency Agreement” in relation to any Series of Ordinary Notes requiring a calculation agent (as specified in the applicable Final Terms) means an agreement entered into between the Issuer and the Calculation Agent for such purposes;

“Calculation Agent” means, in relation to the Ordinary Notes of any Series requiring a calculation agent (as specified in the applicable Final Terms), (i) the person appointed as calculation agent in relation to the Ordinary Notes by the Issuer pursuant to the provisions of a Calculation Agency Agreement (or any other agreement) and shall include any successor calculation agent appointed in respect of the Ordinary Notes or (ii) the Principal Paying Agent if specified as such in the applicable Final Terms;

“Calculation Amount” means, in relation to any Series of Notes, the amount specified in the applicable Final Terms to calculate Fixed Coupon Amount(s), Broken Amount(s), the relevant Final Redemption Amount and the relevant Early Redemption Amount (as applicable);

A “Capital Event” means the determination by the Issuer, after consultation with the FSAN, that, as a result of a change in Norwegian law or Applicable Banking Regulations or any change in the official application or interpretation thereof becoming effective on or after the Issue Date, the Subordinated Notes are fully excluded from Tier 2 capital, such determination to be confirmed by the Issuer in a certificate signed by two authorised signatories of the Issuer;

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“CIBOR” means the Copenhagen inter-bank offered rate;

“CITA” means the Copenhagen t/n Interest Average;

“EONIA” means the Euro Overnight Index Average;

“EURIBOR” means the Euro-zone inter-bank offered rate;

“euro” means the currency introduced at the start of the third stage of European economic and monetary union pursuant to the Treaty;

“FSAN” means the Financial Supervisory Authority of Norway (Finanstilsynet) or such other agency of the Kingdom of Norway as assumes or performs the functions as at the Issue Date performed by the FSAN;

“HIBOR” means the Hong Kong inter-bank offered rate;

“Interest Commencement Date” means, in the case of interest bearing Ordinary Notes, the date specified in the applicable Final Terms from and including which the Ordinary Notes bear interest, which may or may not be the Issue Date;

“Issue Date” means, in respect of any Ordinary Notes, the date of issue and purchase of the Ordinary Notes, as specified in the applicable Final Terms;

“LIBOR” means the London inter-bank offered rate;

“NIBOR” means the Norwegian inter-bank offered rate;

“records” of Euroclear and Clearstream, Luxembourg means the records that each of Euroclear and Clearstream, Luxembourg holds for its customers which reflect the amount of such customer’s interest in the Notes;

“Reference Rate” means LIBOR, EURIBOR, NIBOR, CIBOR, CITA EONIA, HIBOR, SIBOR, STIBOR or TIBOR as specified in the applicable Final Terms.

“Register” means the register of bonds of the Issuer required to be maintained pursuant to the Regulations;

“Relevant Date” means the date on which a payment first becomes due, except that, if the full amount of the monies payable has not been duly received by the Principal Paying Agent on or prior to such due date, it means the date on which, the full amount of such monies having been so received, notice to that effect is duly given to the Noteholders in accordance with Condition 13 above;

“Securities Act” means the United States Securities Act of 1933, as amended;

“STIBOR” means the Stockholm Inter-bank offered rate;

“Tier 2 capital” means Tier 2 capital (Norw. “Tilleggskapital”) as described in § 4 of the Norwegian regulation of 1990-06-01 no. 435 about calculation of risk capital of financial institutions, clearing houses and securities trading companies (Norw. “FOR 1990-06-01 nr 435: Forskrift om beregning av ansvarlig kapital for finansinstitusjoner, oppgjørssentraler og verdipapirforetak”), as amended or replaced; and

“Treaty” means the Treaty on the functioning of the European Union, as amended.

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TERMS AND CONDITIONS OF THE VPS NOTES

The following are the Terms and Conditions of the VPS Notes (“VPS Conditions”). VPS Notes will not be evidenced by any physical note or document of title other than a statement of account made by the VPS. Ownership of VPS Notes will be recorded and transfer effected only through the book entry system and register maintained by the VPS.

The applicable Pricing Supplement in relation to any Tranche of Exempt Notes may specify other terms and conditions which shall, to the extent so specified or to the extent inconsistent with the following VPS Conditions, replace or modify the following VPS Conditions for the purpose of such Notes. References to “Final Terms” in these VPS Note Conditions in relation to Exempt Notes shall be deemed to refer to the applicable Pricing Supplement where relevant. Reference should be made to “Form of the Notes” for a description of the content of the Final Terms which will specify which of such terms are to apply in relation to the relevant VPS Notes.

References herein to the “VPS Notes” or the “Notes” shall be references to the VPS Notes of this Series and shall mean notes cleared through the Norwegian Central Securities Depositary (Verdipapirsentralen) (“VPS Notes” and the “VPS”, respectively).

The VPS Notes will have the benefit of the trust agreement (such trust agreement as modified and/or supplemented and/or restated from time to time, the “VPS Trustee Agreement”), dated 7 July 2017 made between the Issuer and Nordic Trustee ASA (the “VPS Trustee”, which expression shall include any successor as VPS Trustee).

Each Tranche of VPS Notes will be created and held in uncertificated book entry form in accounts with the VPS.

The final terms of each Tranche of VPS Notes (or the relevant provisions thereof) are set out in Part A of the Final Terms which complete these VPS Conditions or, if this VPS Note is neither admitted to trading on a regulated market in the European Economic Area nor offered in the European Economic Area in circumstances where a prospectus is required to be published under the Prospectus Directive (an “Exempt Note”), the final terms (or the relevant provisions thereof) are set out in Part A of the Pricing Supplement and may specify other terms and conditions which shall, to the extent so specified or to the extent inconsistent with these VPS Conditions, replace or modify these VPS Conditions for the purposes of this tranche of VPS Notes. References to the “applicable Final Terms” are to Part A of the Final Terms (or, in the case of Exempt Notes, Part A of the Pricing Supplement) (or the relevant provisions thereof) which supplement these VPS Conditions.

The expression “Prospectus Directive” means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive) to the extent implemented in the relevant Member State of the European Economic Area and includes any relevant implementing measure in the relevant Member State and the expression “2010 PD Amending Directive” means Directive 2010/73/EU.

The VPS Trustee acts for the benefit of the holders of the VPS Notes from time to time (the “VPS Noteholders” and the “holders of VPS Notes”), in accordance with the provisions of the VPS Trustee Agreement and these VPS Conditions.

As used herein, “Tranche” means VPS Notes which are identical in all respects (including as to listing and admission to trading) and “Series” means a Tranche of VPS Notes together with any further Tranche or Tranches of VPS Notes which (i) are expressed to be consolidated and form a single series and (ii) have the same terms and conditions or terms and conditions which are the same in all respects save for the amount and date of the first payment of interest thereon and the date from which interest starts to accrue.

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Copies of the VPS Trustee Agreement are available for inspection during normal business hours at the office of the Issuer at Bjergsted Terrasse 1, PO Box 250, 4066 Stavanger, Norway, and at the office of the VPS Trustee at Haakon VIIs Gate 1, 0161 Oslo, Norway.

The VPS Noteholders are deemed to have notice of, and are entitled to the benefit of, all the provisions of the VPS Trustee Agreement and the Final Terms which are applicable to them. The statements in these VPS Conditions include summaries of, and are subject to, the detailed provisions of the VPS Trustee Agreement.

Words and expressions defined in the VPS Trustee Agreement or used in the applicable Final Terms shall have the same meanings where used in these VPS Conditions unless the context otherwise requires or unless otherwise stated and provided that, in the event of inconsistency between the VPS Trustee Agreement and the applicable Final Terms, the applicable Final Terms will prevail.

1 Form, Denomination and Title

The VPS Notes are issued in uncertificated book entry form in the currency and Specified Denomination(s) as shown in Part A of the relevant Final Terms, provided that in the case of any Notes which are to be admitted to trading on a regulated market within the European Economic Area or offered to the public in a Member State of the European Economic Area in circumstances which require the publication of a Prospectus under the Prospectus Directive, the minimum Specified Denomination shall be €100,000 (or its equivalent in any other currency as at the date of issue of the relevant VPS Notes) and will be registered with a separate securities identification code in the VPS.

VPS Notes of one Specified Denomination may not be exchanged for Notes, VPS or otherwise, of another Specified Denomination. VPS Notes will be registered with a separate securities identification code in the VPS.

VPS Notes may not be exchanged for Notes other than VPS Notes, issued by the Issuer, and vice versa.

Unless this VPS Note is an Exempt Note, this VPS Note may be a Fixed Rate Note, a Floating Rate Note (which term shall include a CMS Linked Interest Note if this Note is specified as being a CMS Linked Interest Note in the applicable Final Terms), a Reset Note or a Zero Coupon Note, depending upon the Interest Basis shown in the applicable Final Terms.

If this VPS Note is an Exempt Note, this VPS Note may be a Fixed Rate Note, a Floating Rate Note (which term shall include a CMS Linked Interest Note if this Note is specified as being a CMS Linked Interest Note in the applicable Pricing Supplement), a Reset Note, a Zero Coupon Note, an Index Linked Interest Note or a Dual Currency Interest Note, depending upon the Interest Basis shown in the applicable Pricing Supplement.

If this VPS Note is an Exempt Note, this VPS Note may also be an Index Linked Redemption Note, an Instalment Note, a Dual Currency Redemption Note, a Partly Paid Note, depending on the Redemption/Payment Basis shown in the applicable Pricing Supplement.

A VPS Note may also be an Unsubordinated Note or a Subordinated Note, as indicated in the applicable Final Terms.

A VPS Note may be a combination of any of the foregoing, depending on the Redemption/Payment Basis shown in the applicable Final Terms.

The holder of a VPS Note will be the person evidenced as such by a book entry in the records of the VPS. The Issuer and the VPS Trustee may rely on a certificate of the VPS or one issued on behalf of the VPS by an account-carrying institution as to a particular person being a VPS Noteholder.

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Title to the VPS Notes will pass by registration in the VPS between the direct or indirect accountholders at the VPS in accordance with the rules and procedures of the VPS that are in force from time to time. Where a nominee is so evidenced, it shall be treated by the Issuer as the holder of the relevant VPS Note.

2 Status of the VPS Notes

(a) Status of the Unsubordinated Notes

This Condition 2(a) applies only to Unsubordinated Notes and references to “VPS Notes” in this Condition shall be construed accordingly.

The VPS Notes of each Tranche constitute direct, unconditional, unsubordinated and unsecured obligations of the Issuer and rank pari passu among themselves and (save for certain debts required to be preferred by law) equally with all other unsecured obligations (including deposits) (other than subordinated obligations, if any) of the Issuer, present and future, from time to time outstanding. So long as any of the Notes remains outstanding, the Issuer undertakes to ensure that, the obligations of the Issuer under the Notes rank and will rank pari passu with all other unsecured and unsubordinated obligations (including deposits) of the Issuer and with all its unsecured and unsubordinated obligations under guarantees of obligations of third parties, in each case except for any obligations preferred by mandatory provisions of applicable law.

(b) Status of the Subordinated Notes

This Condition 2(b) applies only to Subordinated Notes and references to “VPS Notes” and “Noteholders” in this Condition 2(b) shall be construed accordingly.

(i) The VPS Notes of each Tranche constitute unsecured subordinated obligations of the Issuer and rank pari passu without any preference among themselves and at least equally with all other Tier 2 capital obligations of the Issuer (or any other obligations which, by their terms, are expressed to rank pari passu with the Subordinated Notes, in each case whether actual or contingent and having a fixed maturity from time to time outstanding. The Notes shall, in the event of a liquidation, dissolution, administration or other winding-up of the Issuer by way of public administration, be subordinated in right of payment only to the claims against the Issuer of all unsubordinated creditors of the Issuer and to claims with greater priority than Tier 2 capital or which are preferred under Norwegian law generally.

(ii) Under Norwegian legislation, if the Issuer’s most recent audited accounts reveal that its net assets are less than 25 per cent. of its share capital and share premium reserve, the general meeting of the Issuer can or the relevant authorities can if the general meeting of the Issuer does not do so: first, cancel the Issuer’s share capital and share premium reserve to compensate for the shortfall, and secondly, if any remaining shortfall exceeds a substantial part (as determined by the general meeting of the Issuer or by the relevant Norwegian authorities) of the Issuer’s subordinated loan capital, cancel, in whole or in part, such subordinated loan capital (which would include principal and interest in respect of all Subordinated Notes).

The Issuer shall give not more than 30 nor less than five Business Days’ (as defined in Condition 3(b)) prior notice to the Calculation Agent and, as the case may be, and to the Noteholders in accordance with Condition 13 of any cancellation of principal and/or interest in respect of any Subordinated Notes pursuant to this Condition 2(b).

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To the extent that part only of the outstanding principal amount of any Subordinated Notes has been cancelled as provided above, interest will continue to accrue in accordance with the terms hereof on the then outstanding principal amount of such Subordinated Notes.

No Noteholder who becomes, in the event of a liquidation, dissolution or winding-up of the Issuer by way of public administration, indebted to the Issuer shall be entitled to exercise any right of set-off or counterclaim against moneys owed by the Issuer in respect of the Notes held by such Noteholder.

3 Interest

(a) Interest on Fixed Rate Notes

Each Fixed Rate Note bears interest on its outstanding nominal amount from (and including) the Interest Commencement Date at the rate(s) per annum equal to the Rate(s) of Interest. Interest will be payable in arrear on the Interest Payment Date(s) in each year up to (and including) the Maturity Date.

Except as provided in the applicable Final Terms, the amount of interest payable on each Interest Payment Date in respect of the Fixed Interest Period ending on (but excluding) such date will amount to the Fixed Coupon Amount. Payments of interest on any Interest Payment Date will, if so specified in the applicable Final Terms, amount to the Broken Amount so specified.

As used in these VPS Conditions, “Fixed Interest Period” means the period from (and including) an Interest Payment Date (or the Interest Commencement Date) to (but excluding) the next (or first) Interest Payment Date.

If interest is required to be calculated for a period other than a Fixed Interest Period, such interest shall be calculated by applying the Rate of Interest to each Specified Denomination, multiplying such sum by the applicable Day Count Fraction, and rounding the resultant figure to the nearest sub- unit of the relevant Specified Currency, half of any such sub-unit being rounded upwards or otherwise in accordance with applicable market convention.

In these VPS Conditions:

“Day Count Fraction” means, in respect of the calculation of an amount of interest in accordance with this Condition 3:

(i) if “Actual/Actual (ICMA)” is specified in the applicable Final Terms:

(A) in the case of VPS Notes where the number of days in the relevant period from (and including) the most recent Interest Payment Date (or, if none, the Interest Commencement Date) to (but excluding) the relevant payment date (the “Accrual Period”) is equal to or shorter than the Determination Period during which the Accrual Period ends, the number of days in such Accrual Period divided by the product of (1) the number of days in such Determination Period and (2) the number of Determination Dates (as specified in the applicable Final Terms) that would occur in one calendar year; or

(B) in the case of VPS Notes where the Accrual Period is longer than the Determination Period during which the Accrual Period ends, the sum of:

(1) the number of days in such Accrual Period falling in the Determination Period in which the Accrual Period begins divided by the product of (x) the number of days in such Determination Period and (y) the number of Determination Dates (as

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specified in the applicable Final Terms) that would occur in one calendar year; and

(2) the number of days in such Accrual Period falling in the next Determination Period divided by the product of (x) the number of days in such Determination Period and (y) the number of Determination Dates that would occur in one calendar year; and

(ii) if “30/360” is specified in the applicable Final Terms, the number of days in the period from (and including) the most recent Interest Payment Date (or, if none, the Interest Commencement Date) to (but excluding) the relevant payment date (such number of days being calculated on the basis of a year of 360 days with 12 30-day months) divided by 360.

“Determination Period” means each period from (and including) a Determination Date to but excluding the next Determination Date (including, where either the Interest Commencement Date or the final Interest Payment Date is not a Determination Date, the period commencing on the first Determination Date prior to, and ending on the first Determination Date falling after, such date); and

“sub-unit” means, with respect to any currency other than euro, the lowest amount of such currency that is available as legal tender in the country of such currency and, with respect to euro, means one cent.

(b) Interest on Floating Rate Notes

(i) Interest Payment Dates

Each Floating Rate Note bears interest on its outstanding nominal amount from (and including) the Interest Commencement Date and such interest will be payable in arrear on either:

(A) the Specified Interest Payment Date(s) in each year specified in the applicable Final Terms; or

(B) if no Specified Interest Payment Date(s) is/are specified in the applicable Final Terms, each date (each such date, together with each Specified Interest Payment Date, an “Interest Payment Date”) which falls within the number of months or other period specified as the Specified Period in the applicable Final Terms after the preceding Interest Payment Date or, in the case of the first Interest Payment Date, within the specified period after the Interest Commencement Date.

Such interest will be payable in respect of each Interest Period (which expression shall, in these VPS Conditions, mean the period from (and including) an Interest Payment Date (or the Interest Commencement Date) to (but excluding) the next (or first) Interest Payment Date).

If a Business Day Convention is specified in the applicable Final Terms and (x) if there is no numerically corresponding day on the calendar month in which an Interest Payment Date should occur or (y) if any Interest Payment Date would otherwise fall on a day which is not a Business Day, then, if the Business Day Convention specified is:

(1) in any case where Specified Periods are specified in accordance with Condition 3(b)(i)(B) above, the Floating Rate Convention, such Interest Payment Date (i) in the case of (x) above, shall be the last day that is a Business Day in the relevant month and the provisions of (B) below shall apply mutatis mutandis or (ii) in the case of (y) above, shall be postponed to the next day which is a Business Day unless it would thereby fall into the next calendar month, in which event (A) such Interest Payment Date shall be

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brought forward to the immediately preceding Business Day and (B) each subsequent Interest Payment Date shall be the last Business Day in the month which falls in the Specified Period after the preceding applicable Interest Payment Date occurred; or

(2) the Following Business Day Convention, such Interest Payment Date shall be postponed to the next day which is a Business Day; or

(3) the Modified Following Business Day Convention, such Interest Payment Date shall be postponed to the next day which is a Business Day unless it would thereby fall into the next calendar month, in which event such Interest Payment Date shall be brought forward to the immediately preceding Business Day; or

(4) the Preceding Business Day Convention, such Interest Payment Date shall be brought forward to the immediately preceding Business Day.

In these VPS Conditions, “Business Day” means a day which is both:

(A) a day on which commercial banks and foreign exchange markets settle payments and are open for general business (including dealing in foreign exchange and foreign currency deposits) in each Additional Business Centre (other than TARGET2 System) specified in the applicable Final Terms;

(B) if TARGET2 System is specified as an Additional Business Centre in the applicable Final Terms, a day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer (TARGET2) System (the “TARGET2 System”) is open; and

(C) either (1) in relation to any sum payable in a Specified Currency other than euro, a day on which commercial banks and foreign exchange markets settle payments and are open for general business (including dealing in foreign exchange and foreign currency deposits) in the principal financial centre of the country of the relevant Specified Currency or (2) in relation to any sum payable in euro, a day on which TARGET2 System is open.

(ii) Rate of Interest

The Rate of Interest payable from time to time in respect of Floating Rate Notes will be determined in the manner specified in the applicable Final Terms.

(A) ISDA Determination for Floating Rate Notes

Where ISDA Determination is specified in the applicable Final Terms as the manner in which the Rate of Interest is to be determined, the Rate of Interest for each Interest Period will be the relevant ISDA Rate plus or minus (as indicated in the applicable Final Terms) the Margin (if any). For the purposes of this sub-paragraph (A), “ISDA Rate” for an Interest Period means a rate equal to the Floating Rate that would be determined by the Calculation Agent under an interest rate swap transaction if the Calculation Agent were acting as Calculation Agent for that swap transaction under the terms of an agreement incorporating the 2006 ISDA Definitions, as published by the International Swaps and Derivatives Association, Inc. and as amended and updated as at the Issue Date of the first Tranche of the Notes (the “ISDA Definitions”) and under which:

(1) the Floating Rate Option is as specified in the applicable Final Terms;

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(2) the Designated Maturity is a period specified in the applicable Final Terms; and

(3) the relevant Reset Date is as specified in the applicable Final Terms.

For the purposes of this sub-paragraph (A), “Floating Rate”, “Calculation Agent”, “Floating Rate Option”, “Designated Maturity” and “Reset Date” have the meanings given to those terms in the ISDA Definitions.

Unless otherwise stated in the applicable Final Terms, the Minimum Rate of Interest shall be deemed to be zero.

(B) Screen Rate Determination for Floating Rate Notes other than CMS Linked Interest Notes

Where Screen Rate Determination is specified in the applicable Final Terms as the manner in which the Rate of Interest is to be determined, the Rate of Interest for each Interest Period will, subject as provided below, be either:

(1) the offered quotation; or

(2) the arithmetic mean (rounded if necessary to the fifth decimal place, with 0.000005 being rounded upwards) of the offered quotations,

(expressed as a percentage rate per annum) for the Reference Rate being the Reference Rate specified in the applicable Final Terms, provided that in the case of Notes other than Exempt Notes, the Reference Rate in respect of Floating Rate Notes other than CMS Linked Interest Notes shall be LIBOR, EURIBOR, NIBOR, CIBOR, CITA, EONIA, TIBOR, HIBOR, SIBOR or STIBOR which appears or appear, as the case may be, on the Relevant Screen Page as at the Specified Time on the Interest Determination Date in question plus or minus (as indicated in the applicable Final Terms) the Margin (if any), all as determined by the Principal Paying Agent. If five or more of such offered quotations are available on the Relevant Screen Page, the highest (or, if there is more than one such highest quotation, one only of such quotations) and the lowest (or, if there is more than one such lowest quotation, one only of such quotations) shall be disregarded by the Principal Paying Agent for the purpose of determining the arithmetic mean (rounded as provided above) of such offered quotations.

If the Relevant Screen Page is not available or if, in the case of (1), no offered quotation appears or, in the case of (2), fewer than three such offered quotations appear, in each case at the time specified in the preceding paragraph, the Calculation Agent shall request each of the Reference Banks to provide the Calculation Agent with its offered quotation (expressed as a percentage rate per annum) for the Reference Rate at approximately the Specified Time on the Interest Determination Date in question. If two or more of the Reference Banks provide the Calculation Agent with such offered quotations, the Rate of Interest for the Interest Period shall be the arithmetic mean (rounded if necessary to the fifth decimal place with 0.000005 being rounded upwards) of such offered quotations plus or minus (as appropriate) the Margin (if any), all as determined by the Calculation Agent. “Reference Banks” means (i) in the case of a determination of LIBOR, the principal London office of four major banks in the London inter-bank market, (ii) in the case of a determination of EURIBOR, the principal Euro-zone office of four major banks in the Euro-zone inter-bank market, or (iii) in the case of a determination of any other Reference Rate, the principal Relevant Financial Centre office of four major banks

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in the inter-bank market of the Relevant Financial Centre, in each case selected by the Calculation Agent in consultation with the Issuer.

If on any Interest Determination Date one only or none of the Reference Banks provides the Calculation Agent with such offered quotations as provided in the preceding paragraph, the Rate of Interest for the relevant Interest Period shall be the rate per annum which the Calculation Agent determines as being the arithmetic mean (rounded if necessary to the fifth decimal place, with 0.000005 being rounded upwards) of the rates, as communicated to (and at the request of) the Calculation Agent by the Reference Banks or any two or more of them, at which such banks were offered, at approximately the Specified Time on the relevant Interest Determination Date, deposits in the Specified Currency for a period equal to that which would have been used for the Reference Rate by leading banks in the London inter-bank market (if the Reference Rate is LIBOR) or the Eurozone inter-bank market (if the Reference Rate is EURIBOR) or the inter-bank market of the Relevant Financial Centre (if any other Reference Rate is used) plus or minus (as appropriate) the Margin (if any) or, if fewer than two of the Reference Banks provide the Calculation Agent with offered rates, the offered rate for deposits in the Specified Currency for a period equal to that which would have been used for the Reference Rate, or the arithmetic mean (rounded as provided above) of the offered rates for deposits in the Specified Currency for a period equal to that which would have been used for the Reference Rate, at which, at approximately the Specified Time on the relevant Interest Determination Date, any one or more banks (which bank or banks is or are in the opinion of the Issuer suitable for such purpose) informs the Calculation Agent it is quoting to leading banks in London inter-bank market (if the Reference Rate is LIBOR) or the Euro-zone inter-bank market (if the Reference Rate is EURIBOR) or the inter-bank market of the Relevant Financial Centre (if any other Reference Rate is used) plus or minus (as appropriate) the Margin (if any), provided that, if the Rate of Interest cannot be determined in accordance with the foregoing provisions of this paragraph, the Rate of Interest shall be determined as at the last preceding Interest Determination Date (though substituting, where a different Margin is to be applied to the relevant Interest Period from that which applied to the last preceding Interest Period, the Margin relating to the relevant Interest Period in place of the Margin relating to that last preceding Interest Period).

(C) Screen Rate Determination for Floating Rate Notes which are CMS Linked Interest Notes

Where Screen Rate Determination is specified in the applicable Final Terms as the manner in which the Rate of Interest is to be determined and where “CMS Rate” is specified as the Reference Rate in the applicable Final Terms, the Rate of Interest for each Interest Period will be determined by the Calculation Agent (as specified in the applicable Final Terms) by reference to the following formula:

CMS Rate plus Margin

If (for the purposes of determining the applicable CMS Rate) the Relevant Screen Page is not available, the Calculation Agent shall request each of the Reference Banks to provide the Calculation Agent with its quotation for the Relevant Swap Rate at approximately the Specified Time on the Interest Determination Date in question. If three or more of the Reference Banks provide the Calculation Agent with such quotation, the CMS Rate for such Interest Period shall be the arithmetic mean of such

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quotations, eliminating (only where four or five of the Reference Banks provide such quotation) the highest quotation (or, in the event of equality, one of the highest) and the lowest quotation (or, in the event of equality, one of the lowest).

If on any Interest Determination Date less than three or none of the Reference Banks provides the Calculation Agent with such quotations as provided in the preceding paragraph, the CMS Rate shall be determined as at the last preceding Interest Determination Date (though substituting, where a different Margin is to be applied to the relevant Interest Period from that which applied to the last preceding Interest Period, the Margin relating to the relevant Interest Period, in place of the Margin relating to that last preceding Interest Period).

For the purposes of this sub-paragraph (C):

“CMS Rate” shall mean the applicable swap rate for swap transactions in the Reference Currency with a maturity of the Designated Maturity, expressed as a percentage, which appears on the Relevant Screen Page as at the Specified Time on the Interest Determination Date in question, all as determined by the Calculation Agent.

“Reference Banks” means (i) where the Reference Currency is Euro, the principal office of five leading swap dealers in the Eurozone inter-bank market, (ii) where the Reference Currency is Sterling, the principal London office of five leading swap dealers in the London inter-bank market, (iii) where the Reference Currency is United States dollars, the principal New York City office of five leading swap dealers in the New York City inter-bank market, or (iv) in the case of any other Reference Currency, the principal Relevant Financial Centre office of five leading swap dealers in the inter-bank market, in each case selected by the Calculation Agent in consultation with the Issuer.

“Relevant Swap Rate” means:

(i) where the Reference Currency is Euro, the mid-market annual swap rate determined on the basis of the arithmetic mean of the bid and offered rates for the annual fixed leg, calculated on a 30/360 day count basis, of a fixed-for-floating euro interest rate swap transaction with a term equal to the Designated Maturity commencing on the first day of the relevant Interest Period and in a Representative Amount with an acknowledged dealer of good credit in the swap market, where the floating leg, in each case calculated on an Actual/360 day count basis, is equivalent to EUR-EURIBOR-Reuters (as defined in the ISDA Definitions, as published by the International Swaps and Derivatives Association, Inc. and as amended and updated as at the Issue Date of the first Tranche of the Notes (the "ISDA Definitions")) with a designated maturity determined by the Calculation Agent by reference to standard market practice and/or the ISDA Definitions;

(ii) where the Reference Currency is Sterling, the mid-market semi-annual swap rate determined on the basis of the arithmetic mean of the bid and offered rates for the semi-annual fixed leg, calculated on an Actual/365 (Fixed) day count basis, of a fixed-for-floating Sterling interest rate swap transaction with a term equal to the Designated Maturity commencing on the first day of the relevant Interest Period and in a Representative Amount with an acknowledged dealer of good credit in the swap market,

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where the floating leg, in each case calculated on an Actual/365 (Fixed) day count basis, is equivalent (A) if the Designated Maturity is greater than one year, to GBP-LIBOR-BBA (as defined in the ISDA Definitions) with a designated maturity of six months or (B) if the Designated Maturity is one year or less, to GBP-LIBOR-BBA (as defined in the ISDA Definitions) with a designated maturity of three months;

(iii) where the Reference Currency is United States dollars, the mid-market semi-annual swap rate determined on the basis of the mean of the bid and offered rates for the semi-annual fixed leg, calculated on a 30/360 day count basis, of a fixed-for-floating United States dollar interest rate swap transaction with a term equal to the Designated Maturity commencing on the first day of the relevant Interest Period and in a Representative Amount with an acknowledged dealer of good credit in the swap market, where the floating leg, calculated on an Actual/360 day count basis, is equivalent to USD-LIBOR-BBA (as defined in the ISDA Definitions) with a designated maturity of three months; and

(iv) in the case of Exempt Notes only, where the Reference Currency is any other currency or if the applicable Final Terms specifies otherwise, the mid-market swap rate as determined in accordance with the applicable Final Terms.

“Representative Amount” means an amount that is representative for a single transaction in the relevant market at the relevant time.

(iii) Minimum Rate of Interest and/or Maximum Rate of Interest

If the applicable Final Terms specifies a Minimum Rate of Interest for any Interest Period, then, if the Rate of Interest in respect of such Interest Period determined in accordance with the provisions of paragraph (ii) above is less than such Minimum Rate of Interest, the Rate of Interest for such Interest Period shall be such Minimum Rate of Interest.

If the applicable Final Terms specifies a Maximum Rate of Interest for any Interest Period, then, if the Rate of Interest in respect of such Interest Period determined in accordance with the provisions of paragraph (ii) above is greater than such Maximum Rate of Interest, the Rate of Interest for such Interest Period shall be such Maximum Rate of Interest.

(iv) Determination of Rate of Interest and Calculation of Interest Amounts

The Calculation Agent, in the case of Floating Rate Notes which are VPS Notes, will at or as soon as practicable after each time at which the Rate of Interest is to be determined, determine the Rate of Interest for the relevant Interest Period.

The Calculation Agent will calculate the amount of interest (the “Interest Amount”) payable on the Floating Rate Notes for the relevant Interest Period by applying the Rate of Interest to each case, multiplying such sum by the applicable Day Count Fraction, and rounding the resultant figure to the nearest sub-unit of the relevant Specified Currency, half of any such sub-unit being rounded upwards or otherwise in accordance with applicable market convention. Where the Specified Denomination of a Floating Rate Note is a multiple of the Calculation Amount, the Interest Amount payable in respect of such Note shall be the product of the amount (determined in the manner provided above) for the Calculation Amount and the amount by which the

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Calculation Amount is multiplied to reach the Specified Denomination without any further rounding.

“Day Count Fraction” means, in respect of the calculation of an amount of interest in accordance with this Condition 3(b):

(i) if “Actual/Actual (ISDA)” or “Actual/Actual” is specified in the applicable Final Terms, the actual number of days in the Interest Period divided by 365 (or, if any portion of that Interest Period falls in a leap year, the sum of (I) the actual number of days in that portion of the Interest Period falling in a leap year divided by 366 and (II) the actual number of days in that portion of the Interest Period falling in a non- leap year divided by 365);

(ii) if “Actual/365 (Fixed)” is specified in the applicable Final Terms, the actual number of days in the Interest Period divided by 365;

(iii) if “Actual/365 (Sterling)” is specified in the applicable Final Terms, the actual number of days in the Interest Period divided by 365 or, in the case of an Interest Payment Date falling in a leap year, 366;

(iv) if “Actual/360” is specified in the applicable Final Terms, the actual number of days in the Interest Period divided by 360;

(v) if “30/360”, “360/360” or “Bond Basis” is specified in the applicable Final Terms, the number of days in the Interest Period divided by 360, calculated on a formula basis as follows:


where:





“D1” is the first calendar day, expressed as a number, of the Interest Period, unless such number is 31, in which case D1 will be 30; and

“D2” is the calendar day, expressed as a number, immediately following the last day included in the Interest Period, unless such number would be 31 and D1 is greater than 29, in which case D2 will be 30;

(vi) if “30E/360” or “Eurobond Basis” is specified in the applicable Final Terms, the number of days in the Interest Period divided by 360, calculated on a formula basis as follows:


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where:





“D1” is the first calendar day, expressed as a number, of the Interest Period, unless such number would be 31, in which case D1 will be 30; and

“D2” is the calendar day, expressed as a number, immediately following the last day included in the Interest Period, unless such number would be 31, in which case D2 will be 30;

(vii) if “30E/360 (ISDA)” is specified in the applicable Final Terms, the number of days in the Interest Period divided by 360, calculated on a formula basis as follows:

Day Count Fraction = �360 x �Y2 - Y1 �� + �30 x �M2 - M1 ��+�D2-D1�360

where:





“D1” is the first calendar day, expressed as a number, of the Interest Period, unless (i) that day is the last day of February or (ii) such number would be 31, in which case D1 will be 30; and

“D2” is the calendar day, expressed as a number, immediately following the last day included in the Interest Period, unless (i) that day is the last day of February but not the Maturity Date or (ii) such number would be 31 and D2 will be 30.

(v) Linear Interpolation

Where Linear Interpolation is specified as applicable in respect of an Interest Period in the applicable Final Terms, the Rate of Interest for such Interest Period shall be calculated by the Principal Paying Agent by straight line linear interpolation by reference to two rates based on the relevant Reference Rate (where Screen Rate Determination is specified as applicable in the applicable Final Terms) or the relevant Floating Rate Option (where ISDA Determination is specified as applicable in the applicable Final Terms), one of which shall be determined as if the

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Designated Maturity were the period of time for which rates are available next shorter than the length of the relevant Interest Period and the other of which shall be determined as if the Designated Maturity were the period of time for which rates are available next longer than the length of the relevant Interest Period provided however that if there is no rate available for a period of time next shorter or, as the case may be, next longer, then the Principal Paying Agent shall determine such rate at such time and by reference to such sources as it determines appropriate.

(vi) Determination or Calculation by the VPS Trustee

If for any reason at any relevant time the Calculation Agent defaults in its obligation to determine the Rate of Interest, the VPS Trustee shall determine the Rate of Interest at such rate as, in its absolute discretion (having such regard as it shall think fit to the foregoing provisions of this Condition 3(b), but subject always to any Minimum Rate of Interest or Maximum Rate of Interest specified in the applicable Final Terms), it shall deem fair and reasonable in all the circumstances or, as the case may be, the VPS Trustee shall calculate the Interest Amount(s) in such manner as it shall deem fair and reasonable in all the circumstances and each such determination or calculation shall be deemed to have been made by the Calculation Agent.

(vii) Notification of Rate of Interest and Interest Amounts

The Calculation Agent will cause the Rate of Interest and each Interest Amount for each Interest Period and the relevant Interest Payment Date to be notified to the Issuer and any stock exchange on which the relevant Floating Rate Notes are for the time being listed (by no later than the first day of each Interest Period) and notice thereof to be published in accordance with Condition 10 as soon as possible after their determination but in no event later than the fourth London Business Day thereafter. Each Interest Amount and Interest Payment Date so notified may subsequently be amended (or appropriate alternative arrangements made by way of adjustment) without prior notice in the event of an extension or shortening of the Interest Period. Any such amendment will promptly be notified to each stock exchange on which the relevant Floating Rate Notes are for the time being listed and to the Noteholders in accordance with Condition 10. For the purposes of this paragraph, the expression “London Business Day” means a day (other than a Saturday or a Sunday) on which banks and foreign exchange markets are open for general business in London.

(viii) Certificates to be final

All certificates, communications, opinions, determinations, calculations, quotations and decisions given, expressed, made or obtained for the purposes of the provisions of this Condition 3(b), by the Calculation Agent, shall (in the absence of wilful default, bad faith or manifest error) be binding on all parties and (in the absence as aforesaid) no liability shall attach to the Calculation Agent or the VPS Trustee (if applicable) in connection with the exercise or non-exercise by it of its powers, duties and discretions pursuant to such provisions.

(c) Exempt Notes

In the case of Exempt Notes which are also Floating Rate Notes where the applicable Pricing Supplement identifies that Screen Rate Determination applies to the calculation of interest, if the Reference Rate from time to time is specified in the applicable Pricing Supplement as being other than LIBOR, EURIBOR or CMS Rate, the Rate of Interest in respect of such Exempt Notes will be determined as provided in the applicable Pricing Supplement.

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The rate or amount of interest payable in respect of Exempt Notes which are not also Fixed Rate Notes or Floating Rate Notes shall be determined in the manner specified in the applicable Pricing Supplement, provided that where such Notes are Index Linked Interest Notes the provisions of Condition 3(b) shall, save to the extent amended in the applicable Pricing Supplement, apply as if the references therein to Floating Rate Notes and to the Principal Paying Agent were references to Index Linked Interest Notes and the Calculation Agent, respectively, and provided further that the Calculation Agent will notify the Principal Paying Agent of the Rate of Interest for the relevant Interest Period as soon as practicable after calculating the same.

In the case of Partly Paid Notes (other than Partly Paid Notes which are Zero Coupon Notes), interest will accrue as aforesaid on the paid-up nominal amount of such Notes and otherwise as specified in the applicable Pricing Supplement.

(d) Interest on Reset Notes

(i) Rate of Interest

Each Reset Note bears interest:

(c) from (and including) the Interest Commencement Date to (but excluding) the First Reset Date (the “Initial Period”), at the Initial Rate of Interest;

(d) for the First Reset Period, at the First Reset Rate of Interest; and

(e) for each Subsequent Reset Period thereafter (if any) to (but excluding) the Maturity Date, at the relevant Subsequent Reset Rate of Interest.

Interest will be payable, in each case, in arrear on the Interest Payment Date(s) in each year up to (and including) the Maturity Date.

Except as provided in the applicable Final Terms, the amount of interest payable on each Interest Payment Date in respect of each Interest Period falling in the Initial Period will amount to the Fixed Coupon Amount. Payments of interest on the first Interest Payment Date will, if so specified in the applicable Final Terms or, as the case may be, the applicable Pricing Supplement, amount to the Broken Amount(s) so specified.

The Calculation Agent will at or as soon as practicable after each time at which a Rate of Interest in respect of a Reset Period is to be determined, determine the relevant Rate of Interest for such Reset Period.

If interest is required to be calculated for a period other than a Fixed Interest Period, such interest shall be calculated by applying the Rate of Interest to each Specified Denomination, multiplying such sum by the applicable Day Count Fraction, and rounding the resultant figure to the nearest sub-unit of the relevant Specified Currency, half of any such sub-unit being rounded upwards or otherwise in accordance with applicable market convention.

(ii) Fallbacks

If on any Reset Determination Date, the Relevant Screen Page is not available or the Mid-Swap Rate does not appear on the Relevant Screen Page as at the Specified Time on such Reset Determination Date, the Rate of Interest applicable to the Notes in respect of each Interest Period falling in the relevant Reset Period will be determined by the Calculation Agent on the following basis:

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(a) the Calculation Agent shall request each of the Reset Reference Banks to provide the Calculation Agent with its Mid-Market Swap Rate Quotation as at approximately the Specified Time on the Reset Determination Date in question;

(b) if at least three of the Reset Reference Banks provide the Calculation Agent with Mid-Market Swap Rate Quotations, the First Reset Rate of Interest or the Subsequent Reset Rate of Interest (as applicable) for the relevant Reset Period will be equal to the sum of (A) the arithmetic mean (rounded, if necessary, to the nearest 0.001 per cent. (0.0005 per cent. being rounded upwards)) of the relevant quotations provided, eliminating the highest quotation (or, in the event of equality, one of the highest) and the lowest (or, in the event of equality, one of the lowest) and (B) the Relevant Reset Margin, all as determined by the Calculation Agent in consultation with the Issuer;

(c) if only two relevant quotations are provided, the First Reset Rate of Interest or the Subsequent Reset Rate of Interest (as applicable) for the relevant Reset Period will be equal to the sum of (A) the arithmetic mean (rounded as aforesaid) of the relevant quotations provided and (B) the Relevant Reset Margin, all as determined by the Calculation Agent;

(d) if only one relevant quotation is provided, the First Reset Rate of Interest or the Subsequent Reset Rate of Interest (as applicable) for the relevant Reset Period will be equal to the sum of (A) the relevant quotation provided and (B) the Relevant Reset Margin, all as determined by the Calculation Agent; and

(e) if none of the Reset Reference Banks provides the Calculation Agent with a Mid-Market Swap Rate Quotation as provided in the foregoing provisions of this Condition 3(d), the First Reset Rate of Interest or the Subsequent Reset Rate of Interest (as applicable) will be either:

(A) if Prior Rate of Interest is so specified in the applicable Final Terms or, as the case may be, the applicable Pricing Supplement, equal to the sum of (A) the Mid-Swap Rate determined on the last preceding Reset Determination Date and (B) the Relevant Reset Margin or, in the case of the first Reset Determination Date, the First Reset Rate of Interest will be equal to the sum of (A) the Initial Mid-Swap Rate and (B) the Relevant Reset Margin, all as determined by the Calculation Agent in consultation with the Issuer; or

(B) if Calculation Agent Determination is so specified in the applicable Final Terms, determined by the Calculation Agent in consultation with the Issuer taking into consideration all available information that it in good faith deems relevant.

(iii) Mid-Swap Rate Conversion

This Condition 3(d)(iii) is only applicable if Mid-Swap Rate Conversion is specified in the applicable Final Terms as being applicable. If Mid-Swap Rate Conversion is so specified as being applicable, the First Reset Rate of Interest and, if applicable, each Subsequent Reset Rate of Interest will be converted by the Calculation Agent from the Original Mid-Swap Rate Basis specified in the applicable Final Terms or, as the case may be, the applicable Pricing Supplement to a basis which matches the per annum frequency of Interest Payment Dates in respect of the Notes (such calculation to be determined by the Issuer in conjunction with a leading financial institution selected by it).

(iv) Notification of Rate of Interest and Interest Amounts

In respect of a Reset Period, the Calculation Agent will cause the relevant Rate of Interest in respect of such Reset Period and each Reset Notes Interest Amount for each Interest Period falling in such Reset Period to be notified to the Issuer and any stock exchange on which the relevant

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Reset Notes are for the time being listed and the VPS and the VPS Trustee (by no later than the first day of each Interest Period) and notice thereof to be published in accordance with Condition 10 as soon as possible after their determination but in no event later than the fourth London Business Day (as defined in Condition 2(b)(vii)) thereafter. Each Reset Notes Interest Amount so notified may subsequently be amended (or appropriate alternative arrangements made by way of adjustment) without prior notice in the event of an extension or shortening of the Interest Period. Any such amendment will be promptly notified to each stock exchange on which the relevant Reset Notes are for the time being listed and to the Noteholders in accordance with Condition 10.

(v) Certificates to be final

All certificates, communications, opinions, determinations, calculations, quotations and decisions given, expressed, made or obtained for the purposes of the provisions of this Condition 3(d), by the Calculation Agent, shall (in the absence of wilful default, bad faith or manifest error) be binding on all parties and (in the absence as aforesaid) no liability shall attach to the Calculation Agent or the VPS Trustee (if applicable) in connection with the exercise or non-exercise by it of its powers, duties and discretions pursuant to such provisions.

(vi) Definitions

In this Condition 3(d), the following terms shall bear the following meanings:

“Day Count Fraction” has the meaning given in Condition 3(a).

“First Reset Period” means the period from (and including) the First Reset Date to (but excluding) the Second Reset Date or, if no such Second Reset Date is specified in the applicable Final Terms, the Maturity Date.

“First Reset Rate of Interest” means, in respect of the First Reset Period and subject to Condition 3(d)(ii) and Condition 3(d)(iii), the rate of interest determined by the Calculation Agent on the relevant Reset Determination Date as the sum of the relevant Mid-Swap Rate and the First Reset Margin.

“Interest Period” has the meaning given in Condition 3(b).

“Mid-Market Swap Rate” means for any Reset Period the arithmetic mean of the bid and offered rates for the fixed leg payable with a frequency equivalent to the Original Mid-Swap Rate Basis (calculated on the day count basis customary for fixed rate payments in the Specified Currency as determined by the Calculation Agent) of a fixed-for-floating interest rate swap transaction in the Specified Currency which transaction (i) has a term equal to the relevant Reset Period and commencing on the relevant Reset Date, (ii) is in an amount that is representative for a single transaction in the relevant market at the relevant time with an acknowledged dealer of good credit in the swap market and (iii) has a floating leg based on the Mid-Swap Floating Leg Benchmark Rate for the Mid-Swap Floating Leg Maturity (calculated on the day count basis customary for floating rate payments in the Specified Currency as determined by the Calculation Agent).

“Mid-Market Swap Rate Quotation” means a quotation (expressed as a percentage rate per annum) for the relevant Mid-Market Swap Rate.

“Mid-Swap Floating Leg Benchmark Rate” means EURIBOR (if the Specified Currency is euro), LIBOR (if the Specified Currency is U.S. dollars, Pounds Sterling or Swiss Francs), NIBOR (if the Specified Currency is Norwegian Kroner) or (in the case of any other Specified Currency) the benchmark rate most closely connected with such Specified Currency and selected by the Calculation Agent in its discretion after consultation with the Issuer.

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“Mid-Swap Rate” means, in relation to a Reset Determination Date and subject to Condition 3(d)(ii), either:

(a) if Single Mid-Swap Rate is specified in the applicable Final Terms, the rate for swaps in the Specified Currency:



which appears on the Relevant Screen Page; or

(b) if Mean Mid-Swap Rate is specified in the applicable Final Terms, the arithmetic mean (expressed as a percentage rate per annum and rounded, if necessary, to the nearest 0.001 per cent. (0.0005 per cent. being rounded upwards)) of the bid and offered swap rate quotations for swaps in the Specified Currency:



which appear on the Relevant Screen Page,

in either case, as at approximately the Specified Time on such Reset Determination Date, all as determined by the Calculation Agent.

“Original Mid-Swap Rate Basis” has the meaning given in the applicable Final Terms. In the case of Notes other than Exempt Notes, the Original Mid-Swap Rate Basis shall be annual, semi-annual, quarterly or monthly.

“Rate of Interest” means the Initial Rate of Interest, the First Reset Rate of Interest or the relevant Subsequent Reset Rate of Interest, as applicable.

“Relevant Reset Margin” means, in respect of a Reset Period, whichever of the First Reset Margin or the Subsequent Reset Margin is applicable for the purpose of determining the Rate of Interest in respect of such Reset Period.

“Reset Date” means the First Reset Date, the Second Reset Date and each Subsequent Reset Date (as applicable).

“Reset Period” means the First Reset Period or a Subsequent Reset Period, as the case may be.

“Reset Reference Banks” means the principal office in the principal financial centre of the Specified Currency of five major banks in the swap, money, securities or other market most closely connected with the relevant Mid-Swap Rate as selected by the Calculation Agent in consultation with the Issuer.

“Subsequent Reset Period” means the period from (and including) the Second Reset Date to (but excluding) the next Subsequent Reset Date, and each successive period from (and including) a Subsequent Reset Date to (but excluding) the next succeeding Subsequent Reset Date or the Maturity Date, as the case may be.

“Subsequent Reset Rate of Interest” means, in respect of any Subsequent Reset Period and subject to Condition 3(d)(ii) and Condition 3(d)(iii), the rate of interest determined by the Calculation Agent on the relevant Reset Determination Date as the sum of the relevant Mid-Swap Rate and the relevant Subsequent Reset Margin.

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(e) Accrual of interest

Each VPS Note (or in the case of the redemption of part only of a VPS Note, that part only of such VPS Note) will cease to bear interest (if any) from the date for its redemption unless, upon due presentation thereof, payment of principal is improperly withheld or refused. In such event, interest will continue to accrue until the date on which all amounts due in respect of such VPS Note have been paid

(f) Calculation Agent

The Issuer shall procure that there shall at all times be a Calculation Agent if provision is made for this in respect of the VPS Notes and for so long as any VPS Note (which is a Floating Rate Note) is outstanding. If the Calculation Agent is unable or unwilling to act as such or if the Calculation Agent fails duly to establish the Rate of Interest for an Interest Accrual Period or to calculate any Interest Amount, Final Redemption Amount, Early Redemption Amount or Optional Redemption Amount, in respect of such VPS Notes as the case may be, or to comply with any other requirement, the Issuer shall (with the prior approval of the VPS Trustee) appoint a leading bank or investment banking firm engaged in the interbank market (or, if appropriate, money, swap or over- the-counter index options market) that is most closely connected with the calculation or determination to be made by the Calculation Agent (acting through its principal London office or any other office actively involved in such market) to act as such in its place. The Calculation Agent may not resign its duties without a successor having been appointed as aforesaid. The Issuer may act as its own Calculation Agent.

4 Payments

(a) Method of payment

Subject as provided below:

(i) payments in a Specified Currency other than euro will be made by credit or transfer to an account in the relevant Specified Currency maintained by the payee with, or, at the option of the payee, by a cheque in such Specified Currency drawn on, a bank in the principal financial centre of the country of such Specified Currency; and

(ii) payments in euro will be made by credit or transfer to a euro account (or any other account to which euro may be credited or transferred) specified by the payee.

Payments will be subject in all cases to any fiscal or other laws and regulations applicable thereto in the place of payment or other laws to which the Issuer agrees to be subject and the Issuer will not be liable for any taxes or duties of whatever nature imposed or levied by such laws, regulations, directives or agreements, but without prejudice to the provisions of Condition 6 below. References herein to “specified currency” will include any successor currency under applicable law.

(b) Payments in respect of VPS Notes

Payments of principal and interest in respect of VPS Notes and notification thereof to VPS Noteholders will be made to the VPS Noteholders shown in the records of the VPS and will be effected through and in accordance with and subject to the rules and regulations from time to time governing the VPS. Any external Calculation Agent will act solely as agents of the Issuer and do not assume any obligation or relationship of agency or trust for or with any VPS Noteholder. The Issuer reserves the right at any time to vary or terminate the appointment of any external Calculation Agent and to appoint additional or other agents, provided that the Issuer shall at all times maintain (i) a VPS Agent authorised to act as an account operating institution with the VPS (which may be the Issuer

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itself), (ii) one or more external Calculation Agent(s) where the VPS Conditions so require and for so long as any VPS Note (which is a Floating Rate Note) is outstanding, and (iii) such other agents as may be required by any other stock exchange on which the VPS Notes may be listed in each case.

Notice of any such change or of any change of any specified office shall promptly be given to the VPS Noteholders in accordance with Condition 10 below.

(c) Payment Day

If the date for payment of any amount in respect of any VPS Note is not a Payment Day, the holder thereof shall not be entitled to payment of the relevant payment due until the next following Payment Day and shall not be entitled to any interest or other payment in respect of any such delay. For these purposes, “Payment Day” means any day which (subject to Condition 7 below) is:

(i) a day on which commercial banks and foreign exchange markets settle payments and are open for general business (including dealing in foreign exchange and foreign currency deposits) in:

(A) London; and

(B) any Additional Financial Centre (other than the TARGET 2 System) specified in the applicable Final Terms;

(C) if TARGET 2 system is specified as an Additional Financial Centre in the applicable Final Terms, a day on which the TARGET2 system is open; and

(ii) either (1) in relation to any sum payable in a Specified Currency other than euro, a day on which commercial banks and foreign exchange markets settle payments and are open for general business (including dealing in foreign exchange and foreign currency deposits) in the principal financial centre of the country of the relevant Specified Currency or (2) in relation to any sum payable in euro, a day on which the TARGET2 System is open; and


(d) Interpretation of principal and interest

Any reference in these VPS Conditions to principal in respect of the VPS Notes shall be deemed to include, as applicable:

(i) any additional amounts which may be payable with respect to principal under Condition 6;

(ii) the Final Redemption Amount of the VPS Notes;

(iii) the Early Redemption Amount of the VPS Notes;

(iv) the Optional Redemption Amount(s) (if any) of the VPS Notes;

(v) in relation to Exempt Notes redeemable in instalments, the Instalment Amounts;

(vi) in relation to Zero Coupon Notes, the Amortised Face Amount (as defined in Condition 5(e)); and

(vii) any premium and any other amounts (other than interest) which may be payable by the Issuer under or in respect of the VPS Notes.

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Any reference in these Terms and Conditions to interest in respect of the VPS Notes shall be deemed to include, as applicable, any additional amounts which may be payable with respect to interest under Condition 5.

5 Redemption and Purchase

(a) Redemption at maturity

Unless previously redeemed or purchased and cancelled as specified below, each VPS Note will be redeemed by the Issuer at its Final Redemption Amount (which shall be at least equal to the Nominal Amount of each Note) specified in, the applicable Final Terms in the relevant Specified Currency on the Maturity Date.

(b) Redemption at the option of the Issuer (Issuer Call)

Subject in the case of Subordinated Notes, to obtaining the prior written consent of the FSAN as provided in Condition 5(j),

If Issuer Call is specified in the applicable Final Terms, the Issuer may, having given not less than 15 nor more than 30 days’ notice to the VPS Noteholders in accordance with Condition 10 below (which notices shall be irrevocable and shall specify the date fixed for redemption), redeem all or some only of the VPS Notes then outstanding on any Optional Redemption Date and at the Optional Redemption Amount(s) specified in, the applicable Final Terms together, if appropriate, with interest accrued to (but excluding) the relevant Optional Redemption Date. Any such redemption must be of a nominal amount not less than the Minimum Redemption Amount or not more than a Maximum Redemption Amount, in each case as may be specified in the applicable Final Terms. In the case of a partial redemption of VPS Notes, the VPS Notes to be redeemed (“Redeemed VPS Notes”) will be selected in accordance with the rules and procedures of the VPS in the relation to such VPS Notes, not more than 30 days prior to the date fixed for redemption (such date of selection being hereinafter called the “Selection Date”).

(c) Redemption for Taxation Reasons

Subject, in the case of Subordinated Notes, to obtaining prior written consent of the FSAN as provided in Condition 5(j), the VPS Notes may be redeemed at the option of the Issuer in whole, but not in part, at any time (if the VPS Note is not a Floating Rate Note) or on any Interest Payment Date, (if the VPS Note is a Floating Rate Note), on giving not less than 30 nor more than 60 days’ notice to the VPS Noteholders (which notice shall be irrevocable), if:

(i) on the occasion of the next payment due under the VPS Notes, the Issuer has or will become obliged to pay additional amounts as provided or referred to in Condition 6 as a result of any change in, or amendment to, the laws or regulations of the Kingdom of Norway or any authority therein having power to tax or any political subdivision thereof, or any change in the application or official interpretation of such laws or regulations, which change or amendment becomes effective on or after the date on which agreement is reached to issue the first Tranche of the VPS Notes;

(ii) in the case of Subordinated Notes, the effect of such obligation is material on the Issuer; and

(iii) such obligation cannot be avoided by the Issuer taking reasonable measures available to it, provided that no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which the Issuer would be obliged to pay such additional amounts were a payment in respect of the VPS Notes then due.

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Prior to the publication of any notice of redemption pursuant to this Condition 5(c), the Issuer shall deliver to the VPS Trustee to make available to the VPS Noteholders (i) a certificate signed by two directors of the Issuer stating that the Issuer is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of the Issuer so to redeem have occurred, and (ii) an opinion of independent legal advisers of recognised standing to the effect that the Issuer has or will become obliged to pay such additional amounts as a result of such change or amendment.

Notes redeemed pursuant to this Condition 5(c) will be redeemed at their Early Redemption Amount referred to in paragraph (e) below together (if appropriate) with interest accrued to (but excluding) the date of redemption.

(d) Redemption at the option of the VPS Noteholders (Investor Put)

Subject, in the case of Subordinated Notes, to obtaining prior written consent of the FSAN, as provided in Condition 5(j), if Investor Put is specified in the applicable Final Terms, upon the holder of any VPS Note giving to the Issuer in accordance with Condition 10 below not less than 15 nor more than 30 days’ notice the Issuer will, upon the expiry of such notice, redeem, subject to, and in accordance with, the terms specified in the applicable Final Terms, such VPS Note on the Optional Redemption Date and at the Early Redemption Amount together, if appropriate, with interest accrued to (but excluding) the Optional Redemption Date.

To exercise the right to require redemption of the VPS Notes, the holder of the VPS Notes, must, within the notice period, give notice (the “Put Notice”) to the VPS Agent of such exercise in accordance with the standard procedures of the VPS from time to time.

Any Put Notice given by a holder of any VPS Note pursuant to this paragraph shall be irrevocable except where prior to the due date of redemption an Event of Default shall have occurred and be continuing in which event such holder, at its option, may elect by notice to the Issuer to withdraw the notice given pursuant to this paragraph and instead to declare such Note forthwith due and payable pursuant to Condition 8.

(e) Early Redemption Amounts

For the purpose of paragraphs (c) and (d) above and Condition 8:

(i) Each VPS Note (other than a Zero Coupon Note) will be redeemed at its Early Redemption Amount; and

(ii) each Zero Coupon Note will be redeemed at an amount (the “Amortised Face Amount”) calculated in accordance with the following formula:

where:

“RP” means the Reference Price;

“AY” means the Accrual Yield expressed as a decimal; and

“y” is the Day Count Fraction specified in the applicable Final Terms which will be either (i) 30/360 (in which case the numerator will be equal to the number of days (calculated on the basis of a 360-day year consisting of 12 months of 30 days each) from (and including) the Issue Date of the first Tranche of the Notes to (but excluding) the date fixed for redemption or (as the case may be) the date upon which such Note becomes due and repayable and the denominator

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will be 360) or (ii) Actual/360 (in which case the numerator will be equal to the actual number of days from (and including) the Issue Date of the first Tranche of the Notes to (but excluding) the date fixed for redemption or (as the case may be) the date upon which such Note becomes due and repayable and the denominator will be 360) or (iii) Actual/365 (in which case the numerator will be equal to the actual number of days from (and including) the Issue Date of the first Tranche of the Notes to (but excluding) the date fixed for redemption or (as the case may be) the date upon which such Note becomes due and repayable and the denominator will be 365.

(f) Specific redemption provisions applicable to certain types of Exempt Notes

The Final Redemption Amount, any Optional Redemption Amount and the Early Redemption Amount in respect of Index Linked Redemption Notes and Dual Currency Redemption Notes may be specified in, or determined in the manner specified in, the applicable Pricing Supplement. For the purposes of Condition 5(b), Index Linked Interest Notes and Dual Currency Interest Notes may be redeemed only on an Interest Payment Date.

Instalment Notes will be redeemed in the Instalment Amounts and on the Instalment Dates specified in the applicable Pricing Supplement. In the case of early redemption, the Early Redemption Amount of Instalment Notes will be determined in the manner specified in the applicable Pricing Supplement.

Partly Paid Notes will be redeemed, whether at maturity, early redemption or otherwise, in accordance with the provisions of this Condition and the applicable Pricing Supplement.

(g) Purchases

Subject, in the case of Subordinated Notes to obtaining the prior written consent of the FSAN as provided in Condition 5(j), the Issuer or any Subsidiary (as defined in Condition 8(a)) of the Issuer may at any time purchase VPS Notes at any price in the open market or otherwise.

(h) Cancellation

All VPS Notes purchased by or on behalf of the Issuer or any of its Subsidiaries may be cancelled by causing such VPS Notes to be deleted from the records of the VPS.

All VPS Notes which are redeemed will forthwith be cancelled in the same manner. Any VPS Notes so cancelled may not be reissued or resold and the obligations of the Issuer in respect of any such VPS Notes shall be discharged.

(i) Late payment on Zero Coupon Notes

If the amount payable in respect of any Zero Coupon Note upon redemption of such Zero Coupon Note pursuant to paragraph (a), (b), (c) or (d) above or upon its becoming due and repayable as provided in Condition 8 is improperly withheld or refused, the amount due and repayable in respect of such Zero Coupon Note shall be the amount calculated as provided in paragraph (e)(ii) above as though the references therein to the date fixed for the redemption or the date upon which such Zero Coupon Note becomes due and payable were replaced by references to the date which is the earlier of:

(iii) the date on which all amounts due in respect of such Zero Coupon Note have been paid; and

(iv) five days after the date on which the full amount of the moneys payable in respect of such Zero Coupon Notes has been received by the Calculation Agent and notice to that effect has been given to the Noteholders in accordance with Condition 10.

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(j) Consent

In the case of Subordinated Notes, no early redemption in any circumstances or purchase under Condition 5 shall take place without the prior written consent of the FSAN. For the avoidance of doubt, redemption of Subordinated Notes under Condition 5(a) shall not require the consent of the FSAN.

(k) Redemption of Subordinated Notes upon Capital Event

If a Capital Event occurs, the Issuer may, at its option, but subject to obtaining the prior written consent of the FSAN as provided in Condition 5(j), on giving not less than 30 nor more than 60 days’ notice to the Calculation Agent and, in accordance with Condition 10, the Noteholders (which notice shall be irrevocable), on any Interest Payment Date redeem all (but not some only) of the Notes at an amount specified in the applicable Final Terms, together with interest accrued to (but excluding) the date of redemption. Upon the expiry of such notice, the Issuer shall redeem the Subordinated Notes.

6 Taxation

(a) Gross-up

Subject as provided in Condition 6(b) (for the purposes of Subordinated Notes only), all payments of principal and interest in respect of the VPS Notes by the Issuer will be made without withholding or deduction for or on account of any present or future taxes or duties of whatever nature imposed or levied by or on behalf of the Kingdom of Norway or any political subdivision or any authority thereof or therein having power to tax unless such withholding or deduction is required by law.

In that event, the Issuer shall pay such additional amounts as shall result in receipt by the VPS Noteholders of such amounts as would have been received by them had no such withholding or deduction been required, except that no such additional amounts shall be payable with respect to any VPS Note:

(i) Other connection: to, or to a third party on behalf of, a holder who is liable to such taxes, duties, assessments or governmental charges in respect of such VPS Note by reason of his having some connection with the Kingdom of Norway other than the mere holding of the VPS Note or

(ii) Presentation more than 30 days after the Relevant Date: presented for payment more than 30 days after the Relevant Date except to the extent that the holder of it would have been entitled to such additional amounts on presenting it for payment on the thirtieth such day.

As used in these VPS Conditions, “Relevant Date” in respect of any VPS Note means the date on which payment in respect of it first becomes due or (if any amount of the money payable is improperly withheld or refused) the date on which payment in full of the amount outstanding is made or (if earlier) the date seven days after that on which notice is duly given to the VPS Noteholders that, upon further presentation of the VPS Note being made in accordance with the VPS Conditions, such payment will be made, provided that payment is in fact made upon such presentation.

Notwithstanding any other provision of the terms and conditions of the Notes, any amounts to be paid by or on behalf of the Issuer on the Notes will be paid net of any deduction or withholding imposed or required pursuant to Sections 1471 through 1474 of the U.S. Internal Revenue Code (the “Code”), as amended, any current or future regulations or official interpretations thereof, any agreement entered into pursuant to Section 1471(b) of the Code, or an intergovernmental agreement between the United States and another jurisdiction facilitating the implementation of Sections 1471 through 1474 of the

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Code (or any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement) (any such withholding or deduction, a “FATCA Withholding Tax”). None of the Issuer or any other person will be required to pay additional amounts on account of any FATCA Withholding Tax.

(b) Subordinated Notes

This Condition 6(b) shall only apply to Subordinated Notes. Notwithstanding Condition 6(a), the Issuer’s obligation to pay additional amounts will be limited to payments of interest in respect of Subordinated Notes.

7 Prescription

The VPS Notes will become void unless presented for payment within a period of 10 years (in the case of principal) and five years (in the case of interest) after the Relevant Date (as defined in Condition 16 below) in respect thereof.

8 Events of Default

(a) Events of Default relating to Unsubordinated Notes

This Condition 8(a) only applies to Unsubordinated Notes. If any one or more of the following events (each an “Event of Default”) shall occur and be continuing with respect to any Unsubordinated Note:

(i) if default is made in the payment in the Specified Currency of any principal or interest due in respect of the VPS Notes or any of them and in the case of interest that default continues for a period of seven days; or

(ii) if the Issuer fails to perform or observe any of its other obligations under these VPS Note Conditions and (except in any case where the failure is incapable of remedy when no such continuation or notice as is hereinafter mentioned will be required) the failure continues for the period of 30 days next following the service by a Noteholder on the Issuer of notice requiring the same to be remedied; or

(iii) any payment obligation under any indebtedness (including deposits) of the Issuer or any of its Principal Subsidiaries becomes due and repayable prematurely by reason of an event of default (howsoever described) or the Issuer or any of its Principal Subsidiaries fails to make any payment in respect of any indebtedness (including deposits) within 30 days of the due date for payment (or within the originally applicable grace period, if such period is longer than 30 days) or any security given by the Issuer or any of its Principal Subsidiaries for any indebtedness (including deposits) becomes enforceable or if default is made by the Issuer or any of its Principal Subsidiaries in making any payment due under any guarantee and/or indemnity given by it in relation to any obligation of any other person for 30 days (or within the originally applicable grace period, if such period is longer than 30 days), PROVIDED that no such event shall constitute an Event of Default unless the indebtedness (including deposits) or other relative liability either alone or when aggregated with other indebtedness (including deposits) and/or liabilities relating to all (if any) other events which shall have occurred and be outstanding shall amount to at least €10,000,000 (or its equivalent in any other currency) and PROVIDED further that, for the purposes of this Condition 8(a)(iii), neither the Issuer nor any of its Principal Subsidiaries shall be deemed to be in default with respect to any such indebtedness (including deposits), guarantee or indemnity if it shall be contesting in good faith by appropriate means its liability to make payment thereunder; or

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(iv) if any order is made by any competent court or resolution passed for the winding up or dissolution of the Issuer or any of its Principal Subsidiaries, save for the purposes of reorganisation on terms approved by an Extraordinary Resolution of the Noteholders; or

(v) if the Issuer or any of its Principal Subsidiaries ceases or threatens to cease to carry on the whole or a substantial part of its business, save for the purposes of reorganisation on a solvent basis, or the Issuer or any of its Principal Subsidiaries stops or threatens to stop payment of, or is unable to, or admits inability to, pay, its debts (or any class of its debts) as they fall due, or is deemed unable to pay its debts pursuant to or for the purposes of any applicable law, or is adjudicated or found bankrupt or insolvent; or

(vi) if (A) proceedings are initiated against the Issuer or any of its Principal Subsidiaries under any applicable liquidation, insolvency, composition, reorganisation or other similar laws, or an application is made for the appointment of an administrative or other receiver, manager, administrator or other similar official, or an administrative or other receiver, manager, administrator or other similar official is appointed, in relation to the Issuer or any of its Principal Subsidiaries or, as the case may be, in relation to the whole or a substantial part of the undertaking or assets of any of them, or an encumbrancer takes possession of the whole or a substantial part of the undertaking or assets of any of them, or a distress, execution, attachment, sequestration or other process is levied, enforced upon, sued out or put in force against the whole or a substantial part of the undertaking or assets of any of them and (B) in any case (other than the appointment of an administrator) is not discharged within l4 days; or

(vii) if the Issuer or any of its Principal Subsidiaries initiates or consents to judicial proceedings relating to itself under any applicable liquidation, insolvency, composition, reorganisation or other similar laws or makes a conveyance or assignment for the benefit of, or enters into any composition or other arrangement with, its creditors generally (or any class of its creditors) or any meeting is convened to consider a proposal for an arrangement or composition with its creditors generally (or any class of its creditors),

then any holder of an Unsubordinated Note may, by written notice to the Issuer at the specified office of the Calculation Agent, effective upon the date of receipt thereof by the Calculation Agent, declare any Unsubordinated Notes held by the holder to be forthwith due and payable whereupon the same shall become forthwith due and payable at the Early Redemption Amount (as described in Condition 5(e)), together with accrued interest (if any) to the date of repayment, without presentment, demand, protest or other notice of any kind.

For the purpose of these Conditions:

“Principal Subsidiary” at any time shall mean a Subsidiary of the Issuer inter alia:

(A) whose gross revenues attributable to the Issuer (consolidated in the case of a Subsidiary which itself has Subsidiaries) or whose total assets (consolidated in the case of a Subsidiary which itself has Subsidiaries) represent not less than 5 per cent. of the consolidated gross revenues attributable to the shareholders of the Issuer, or, as the case may be, consolidated total assets, of the Issuer and its Subsidiaries taken as a whole, all as calculated respectively by reference to the then latest audited accounts (consolidated or, as the case may be, unconsolidated) of the Subsidiary and the then latest audited consolidated accounts of the Issuer and its Subsidiaries; or

(B) to which is transferred the whole or substantially the whole of the undertaking and assets of a Subsidiary of the Issuer which immediately before the transfer is a Principal Subsidiary.

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A report by the Directors of the Issuer that in their opinion a Subsidiary of the Issuer is/was or is/was not at any particular time or throughout any specified period, a Principal Subsidiary, accompanied, if requested, by a report by the Auditors addressed to the Directors of the Issuer as to proper extraction of the figures used by the Directors of the Issuer in determining the Principal Subsidiaries of the Issuer and mathematical accuracy of the calculations, shall, in the absence of manifest error, be conclusive and binding on all parties; and

“Subsidiary” means any legal entity in which the Issuer either (i) directly or indirectly owns or controls more than 50 per cent. of the entity’s shares and votes, or (ii) is entitled to appoint or remove a majority of the entity’s directors.

(b) Events of Default relating to Subordinated Notes

There are no events of default in relation to Subordinated Notes.

9 Registration and Transfer of VPS Notes

(a) Transfers of interests in VPS Notes

Settlement of sale and purchase transactions in respect of VPS Notes will take place two Oslo Business Days after the date of the relevant transaction. VPS Notes may be transferred between accountholders at the VPS in accordance with the procedures and regulations, for the time being, of the VPS. A transfer of VPS Notes which is held in the VPS through Euroclear or Clearstream, Luxembourg is only possible by using an account operator linked to the VPS.

(b) Registration of transfer upon partial redemption

In the event of a partial redemption of VPS Notes under Condition 5 above, the Issuer shall not be required to register the transfer of any VPS Note, or part of a VPS Note, called for partial redemption.

(c) Costs of registration and administration of the VPS Register

VPS Noteholders will not be required to bear the costs and expenses of effecting any registration, transfer or administration in relation to the VPS Register, except for any costs or expenses of delivery other than by regular uninsured mail and except that the Issuer may require the payment of a sum sufficient to cover any stamp duty, tax or other governmental charge that may be imposed in relation to the registration.

10 Notices

Notices to the VPS Noteholders shall be valid if the relevant notice is given to the VPS for communication by it to the VPS Noteholders and, so long as the VPS Notes are listed on a regulated market, the Issuer shall ensure that notices are duly published in a manner which complies with the rules of such regulated market. Any such notice shall be deemed to have been given on the date two days after delivery to the VPS.

11 Meetings of VPS Noteholders and Modification and Waiver

(a) Provisions with respect to Holders of VPS Notes

The VPS Trustee Agreement contains provisions for convening meetings of the VPS Noteholders to consider any matter affecting their interests, including sanctioning by a majority of votes (as more fully set out in the VPS Trustee Agreement) of a modification of the VPS Notes or any of the provisions of the VPS Trustee Agreement (or, in certain cases, sanctioning by a majority of two-thirds

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of votes). Such a meeting may be convened by the VPS Trustee at the request of the Issuer, Oslo Børs or by VPS Noteholders holding not less than 10 per cent. in nominal amount of the VPS Notes for the time being remaining outstanding.

The quorum at a meeting for passing a resolution is one or more persons holding at least 50 per cent. of the nominal amount of outstanding VPS Notes or at any adjourned meeting one or more persons being or representing VPS Noteholders whatever the nominal amount of the VPS Notes so held or represented, except that at any meeting the business of which includes the modification of certain provisions of the VPS Notes or the VPS Trustee Agreement (including modifying the date of maturity of the VPS Notes or any date for payment of interest thereof, reducing or cancelling the amount of principal or the rate of interest payable in respect of the VPS Notes or altering the currency of payment of the VPS Notes), the quorum shall be one or more persons holding or representing not less than two-thirds of the nominal amount of outstanding VPS Notes, or at any adjourned such meeting one or more persons holding or representing not less than one-third of the nominal amount of the outstanding VPS Notes. A resolution passed at any meeting of the VPS Noteholders shall be binding on all the VPS Noteholders, whether or not they are present at such meeting.

(b) Modification

The VPS Trustee Agreement provides that:

(i) in order to make the following amendments, a majority of at least two-thirds of the votes cast in respect of voting VPS Notes is required:

(I) modification of the Maturity Date of the VPS Notes specified in the applicable Final Terms, or reduction or cancellation of the nominal amount payable upon maturity;

(II) reduction or calculation of the amount payable, or modification of the payment date in respect of any interest in relation to the VPS Notes or variation of the method of calculating the rate of interest in respect of the VPS Notes;

(III) reduction of any Minimum Interest Rate and/or Minimum Interest Rate specified in the applicable Final Terms;

(IV) modification of the currency in which payments under the VPS Notes are to be made;

(V) modification of the majority requirement to pass a resolution in respect of the matters listed in this paragraph (i);

(VI) any alteration of Clause 4.1(f) of the VPS Trustee Agreement (which sets out the matters for which a majority of two-thirds of votes is required);

(VII) the transfer of rights and obligations under the VPS Conditions and the VPS Trustee Agreement to another Issuer; and/or

(VIII) a change of VPS Trustee,

(ii) save as set out in Condition 11(b)(i) above, the VPS Trustee, without providing prior written notice to, or consultation with, the VPS Noteholders may make decisions binding on all affected VPS Noteholders relating to the Final Terms, the VPS Conditions and/or the VPS Trustee Agreement, provided that such decision is either (x) not detrimental to the rights and benefits of the affected VPS Noteholders in any material respect, (y) made solely for rectifying obvious errors and mistakes, or (z) required to be made pursuant to law, court order or other administrative decision. The VPS Trustee shall as soon as possible notify the affected VPS

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Noteholders of any proposal to make such amendments, setting out the date from which the amendment will be effective, unless such notice obviously is unnecessary.

12 VPS Trustee

The VPS Trustee Agreement contains provisions for the indemnification of the VPS Trustee and for its relief from responsibility, including provisions relieving it from taking action unless indemnified and/or secured to its satisfaction. VPS Noteholders are deemed to have accepted and will be bound by the Conditions and the terms of the VPS Trustee Agreement.

13 Further Issues

The Issuer shall be at liberty from time to time without the consent of the VPS Noteholders to create and issue further notes having terms and conditions the same as the VPS Notes or the same in all respects save for the amount and date of the first payment of interest thereon and the date from which interest starts to accrue and so that the same shall be consolidated and form a single Series with the outstanding VPS Notes.

14 Contracts (Rights of Third Parties) Act 1999

No rights are conferred on any person under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this VPS Note, but this does not affect any right or remedy of any person which exists or is available apart from the Contracts (Rights of Third Parties) Act 1999.

15 Governing Law and Submission to Jurisdiction

(a) Governing law

The VPS Notes and any non-contractual obligations arising out of or in connection with the VPS Notes are governed by, and shall be construed in accordance with, English law, save as to Conditions 2(b), 8, 9, 10, 11, 12 and 13 above are governed by and shall be construed in accordance with Norwegian law. The VPS Trustee Agreement is governed by and shall be construed in accordance with Norwegian law.

VPS Notes must comply with the Norwegian act on Registration of Financial Instruments of 5 July 2002 No. 64 (Lov om registrering av finansielle instrumenter), as amended from time to time and the holders of VPS Notes will be entitled to the rights and are subject to the obligations and liabilities which arise under this Act and any related regulations and legislation.

(b) Submission to jurisdiction

The Issuer agrees, for the exclusive benefit of the Paying Agents, and the VPS Noteholders, that the courts of England and Wales are to have jurisdiction to settle any disputes which may arise out of or in connection with the VPS Notes (including a dispute relating to any non-contractual obligations arising out of or in connection with the VPS Notes) and that accordingly any suit, action or proceedings (together referred to as “Proceedings”) arising out of or in connection with the VPS Notes (including any Proceedings relating to any non-contractual obligations arising out of or in connection with the VPS Notes) may be brought in such courts.

The Issuer hereby irrevocably waives any objection which it may have now or hereafter to the laying of the venue of any such Proceedings in any such court and any claim that any such Proceedings have been brought in an inconvenient forum and hereby further irrevocably agrees that a judgment in any such Proceedings brought in the English courts shall be conclusive and binding upon it and may be enforced in the courts of any other jurisdiction.

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The Issuer agrees, for the exclusive benefit of the VPS Trustee and the VPS Noteholders that the courts of Norway are to have jurisdiction to settle any disputes which may arise out of, or in connection with, the VPS Trustee Agreement.

Nothing contained in this Condition 15 shall limit any right to take Proceedings against the Issuer in any other court of competent jurisdiction, nor shall the taking of Proceedings in one or more jurisdictions preclude the taking of Proceedings in any other jurisdiction, whether concurrently or not.

(c) Notwithstanding and to the exclusion of any other term of the Notes or any other agreements, arrangements or understanding between the Issuer and any Noteholder (which, for the purposes of this Condition 15(c), includes each holder of a beneficial interest in the Notes), by its acquisition of the Notes, each Noteholder acknowledges and accepts that any liability arising under the Notes may be subject to the exercise of Norwegian Statutory Loss Absorption Powers by the Relevant Resolution Authority and acknowledges, accepts, consents to and agrees to be bound by:

(i) the effect of the exercise of any Norwegian Statutory Loss Absorption Powers by the Relevant Resolution Authority, which exercise (without limitation) may include and result in any of the following, or a combination thereof:

(A) the reduction of all, or a portion, of the Relevant Amounts in respect of the Notes;

(B) the conversion of all, or a portion, of the Relevant Amounts in respect of the Notes into shares, other securities or other obligations of the Issuer or another person, and the issue to or conferral on the Noteholder of such shares, securities or obligations, including by means of an amendment, modification or variation of the terms of the Notes;

(C) the cancellation of the Notes or the Relevant Amounts in respect of the Notes; and

(D) the amendment or alteration of the perpetual nature of the Notes or amendment of the amount of interest payable on the Notes, or the date on which interest becomes payable, including by suspending payment for a temporary period; and

(ii) the variation of the terms of the Notes, as deemed necessary by the Relevant Resolution Authority, to give effect to the exercise of any Norwegian Statutory Loss Absorption Powers by the Relevant Resolution Authority.

In this Condition 15(c):

“Norwegian Statutory Loss Absorption Powers” means any write-down, conversion, transfer, modification, suspension or similar or related power existing from time to time under, and exercised in compliance with, any laws, regulations, rules or requirements in effect in the Kingdom of Norway, relating to (i) the transposition into Norwegian law of Directive 2014/59/EU as amended or replaced from time to time and (ii) the instruments, rules and standards created thereunder, pursuant to which any obligation of the Issuer (or any affiliate of the Issuer) can be reduced, cancelled, modified, or converted into shares, other securities or other obligations of the Issuer or any other person (or suspended for a temporary period);

“Relevant Amounts” means the outstanding principal amount of the Notes, together with any accrued but unpaid interest and additional amounts due on the Notes. References to such amounts will include amounts that have become due and payable, but which have not been paid, prior to the exercise of any Norwegian Statutory Loss Absorption Powers by the Relevant Resolution Authority; and

“Relevant Resolution Authority” means the resolution authority with the ability to exercise any Norwegian Statutory Loss Absorption Powers in relation to the Issuer.

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(d) Appointment of Process Agent in England

The Issuer appoints Hackwood Secretaries Limited at its registered office at One Silk Street, London, EC2Y 8HQ, England as its agent for service of process in England, and undertakes that, in the event of Hackwood Secretaries Limited ceasing so to act or ceasing to be registered in England, it will appoint another person as its agent for service of process in England in respect of any Proceedings. Nothing herein shall affect the right to serve proceedings in any other manner permitted by law.

16 Definitions

In these VPS Conditions the following words shall have the following meanings:

“Applicable Banking Regulations” means at any time the laws, regulations, requirements, guidelines and policies relating to capital adequacy then in effect in Norway including, without limitation to the generality of the foregoing, those regulations, requirements, guidelines and policies relating to capital adequacy adopted by a governmental authority from time to time and then in effect (whether or not such requirements, guidelines or policies have the force of law and whether or not they are applied generally or specifically to the Issuer or to the Issuer and its subsidiaries);

“Calculation Agency Agreement” in relation to any Series of VPS Notes requiring a calculation agent (as specified in the applicable Final Terms) means an agreement entered into between the Issuer and the Calculation Agent for such purposes;

“Calculation Agent” means, in relation to the VPS Notes of any Series requiring a calculation agent (as specified in the applicable Final Terms), (i) the person appointed as calculation agent in relation to the VPS Notes by the Issuer pursuant to the provisions of a Calculation Agency Agreement (or any other agreement) and shall include any successor calculation agent appointed in respect of the VPS Notes or (ii) the Principal Paying Agent if specified as such in the applicable Final Terms;

“Calculation Amount” means, in relation to any Series of VPS Notes, the amount specified in the applicable Final Terms to calculate Fixed Coupon Amount(s), Broken Amount(s), the relevant Final Redemption Amount and the relevant Early Redemption Amount (as applicable);

A “Capital Event” means the determination by the Issuer, after consultation with the FSAN, that, as a result of a change in Norwegian law or Applicable Banking Regulations or any change in the official application or interpretation thereof becoming effective on or after the Issue Date, the Subordinated Notes are fully excluded from Tier 2 capital, such determination to be confirmed by the Issuer in a certificate signed by two authorised signatories of the Issuer;

“CIBOR” means the Copenhagen inter-bank offered rate;

“CITA” means the Copenhagen t/n Interest Average;

“EONIA” means the Euro Overnight Index Average;

“EURIBOR” means the Euro-zone inter-bank offered rate;

“euro” means the currency introduced at the start of the third stage of European economic and monetary union pursuant to the Treaty;

“FSAN” means the Financial Supervisory Authority of Norway (Finanstilsynet) or such other agency of the Kingdom of Norway as assumes or performs the functions as at the Issue Date performed by the FSAN;

“HIBOR” means the Hong Kong inter-bank offered rate;

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“Interest Commencement Date” means, in the case of interest bearing VPS Notes, the date specified in the applicable Final Terms from and including which the VPS Notes bear interest, which may or may not be the Issue Date;

“Issue Date” means, in respect of any VPS Notes, the date of issue and purchase of the VPS Notes, as specified in the applicable Final Terms;

“LIBOR” means the London inter-bank offered rate;

“NIBOR” means the Norwegian inter-bank offered rate;

“Oslo Business Day” means a day on which commercial banks and foreign exchange markets settle payments and are open for general business (including dealing in foreign exchange and foreign currency deposits) in Oslo;

“outstanding” means, in relation to the VPS Notes of any Series, all the VPS Notes issued other than:

(a) those VPS Notes which have been redeemed and cancelled pursuant to the VPS Conditions;

(b) those VPS Notes in respect of which the date for redemption in accordance with the VPS Conditions has occurred and the redemption monies (including all interest (if any) accrued to the date for redemption and any interest (if any) payable under the VPS Conditions after that date) have been duly paid to or to the order of the VPS Agent in the manner provided in these VPS Conditions (and where appropriate notice to that effect has been given to the VPS Noteholders in accordance with the VPS Conditions) and remain available for payment of the relevant VPS Notes;

(c) those VPS Notes which have been purchased and cancelled in accordance with the VPS Conditions; and

(d) those VPS Notes in respect of which claims have become prescribed under the VPS Conditions; provided that for the purpose of:

(i) attending and voting at any meeting of the VPS Noteholders of the Series; and

(ii) determining how many and which VPS Notes of the Series are for the time being outstanding for the purposes of Condition 3 and the noteholder meetings provisions set out in the VPS Trustee Agreement,

those VPS Notes (if any) which are for the time being held by or for the benefit of the Issuer or any Subsidiary of the Issuer shall (unless and until ceasing to be so held) be deemed not to remain outstanding;

“records” of the VPS means the records that the VPS holds for its customers which reflect the amount of such customer’s interest in the VPS Notes;

“Reference Rate” means LIBOR, EURIBOR, NIBOR, CIBOR, CITA, EONIA, HIBOR, SIBOR, STIBOR or TIBOR as specified in the applicable Final Terms;

“Relevant Date” means the date on which a payment first becomes due, except that, if the full amount of the monies payable has not been duly received by the Principal Paying Agent on or prior to such due date, it means the date on which, the full amount of such monies having been so received, notice to that effect is duly given to the VPS Noteholders in accordance with Condition 10 above;

“SIBOR” means the Singapore Inter-bank offered rate;

“STIBOR” means the Stockholm Inter-bank offered rate;

“TIBOR” means the Tokyo inter-bank offered rate;

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“Tier 2 capital” means Tier 2 capital (Norw. “Tilleggskapital”) as described in § 4 of the Norwegian regulation of 1990-06-01 no. 435 about calculation of risk capital of financial institutions, clearing houses and securities trading companies (Norw. “FOR 1990-06-01 nr 435: Forskrift om beregning av ansvarlig kapital for finansinstitusjoner, oppgjørssentraler og verdipapirforetak”), as amended or replaced; and

“Treaty” means the Treaty on the functioning of the European Union, as amended.

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TAXATION

The following is a general description of certain Norwegian, participating Member States (as defined below) and United States tax considerations relating to the Notes. It does not purport to be a complete analysis of all tax considerations relating to the Notes. Prospective purchasers of Notes should consult their tax advisers as to the consequences under the tax laws of the country of which they are resident for tax purposes and the tax laws of Norway, those participating Member States (as defined below) and United States of acquiring, holding and disposing of Notes and receiving payments of interest, principal and/or other amounts under the Notes. This overview is based upon the law as in effect on the date of this Base Prospectus and is subject to any change in law that may take effect after such date.

Norwegian Taxation The statements herein regarding taxation are based on the laws in force in Norway as of the date of this Base Prospectus and are subject to any changes in law occurring after such date. Such changes could be made on a retrospective basis. The following summary does not purport to be a comprehensive description of all the tax considerations that may be relevant to a decision to purchase, own or dispose of the Notes under the Programme. Investors are advised to consult their own tax advisers concerning the overall tax consequences of their ownership of such Notes.

Norwegian Taxation – Non-Residents

Introduction

The tax consequences described below apply to Noteholders who are not tax resident in Norway. In the following paragraphs, it is assumed that the Notes are held in the form of bearer bonds or debentures (mengdegjeldsbrev).

Taxation on interest Interest paid to a non-resident holder of Notes will not be subject to Norwegian income or withholding tax.

Such holder of Notes may, however, be subject to taxation if the holding of Notes is effectively connected with a business carried on by the holder of Notes in Norway or managed from Norway.

Such tax liability may be modified through applicable tax treaties.

A specific proposal for the implementation of withholding tax on interest (with potential exclusions etc.) has been expected for some time, but has still not been presented. The current expectation is that it will be presented before the end of 2017. However, even if a withholding tax on interest is introduced, there are several tax treaties entered into between Norway and other countries, which limit Norway's ability to impose withholding tax on payments to tax residents of the relevant treaty state.

Taxation of capital gains A non-resident holder of Notes is not subject to taxation in Norway on gains derived from the sale, disposal or redemption of the Notes.

Such holder of Notes may, however, be subject to taxation if the holding of Notes is effectively connected with a business carried on by the holder of Notes in Norway or managed from Norway.

Such tax liability may be modified through an applicable tax treaty.

Wealth tax Norway does not levy any property tax or similar taxes on the Notes.

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An individual non-resident holder of Notes is not subject to wealth tax, unless the holding of Notes is effectively connected with a business carried on by the holder of Notes in Norway or managed from Norway.

Such tax liability may be modified through applicable tax treaties.

Transfer tax There is currently no Norwegian transfer tax on the transfer of Notes.

Norwegian Taxation – Norwegian residents

Introduction The tax consequences described below apply to Noteholders who are tax resident in Norway (“Norwegian Noteholders”). Again, it is assumed that the Notes are held in the form of bearer bonds or debentures (mengdegjeldsbrev).

Taxation of interest For Norwegian Noteholders, interest on bonds (such as the Notes) is taxable as “ordinary income” subject to a flat rate of 24 per cent. This applies irrespective of whether the Norwegian Noteholders are individuals or corporations. Interest is taxed according to a realisation principle; as a main rule in the income year in which interest is accrued (i.e. regardless of when the interest is actually paid). For taxpayers without a statutory obligation to keep accounting records, special provisions apply in case of breach of contract resulting in due interest not being paid by the end of the income year.

Taxation upon disposal or redemption of the Notes Redemption at the relevant Maturity Date of the Notes as well as prior disposal of the Notes is treated as a realisation of such Notes and will trigger a capital gain or loss for Norwegian Noteholders under Norwegian tax law. Capital gains will be taxable as “ordinary income”, subject to the flat rate of 24 per cent. Losses will be deductible from a Norwegian Noteholder’s “ordinary income”, taxed at the same rate.

Any capital gain or loss is computed as the difference between the amount received by the Norwegian Noteholder on realisation and the cost price of the Notes. The cost price is equal to the price at which the Norwegian Noteholder acquired the Notes. Costs incurred in connection with the acquisition and realisation of the Notes may be deducted from a Norwegian Noteholder’s taxable income in the year of the realisation.

Net wealth taxation The value of the Notes held by a Norwegian Noteholder at the end of each income year will be included in the computation of his/her taxable net wealth for municipal and state net wealth tax purposes. Under Norwegian tax law, listed notes are valued at their quoted value on 1 January in the relevant assessment year. The marginal rate of net wealth tax is currently 0.85 per cent.

Limited liability companies and certain similar entities are exempt from net wealth taxation.

Inheritance and gift tax

Norway does not impose inheritance tax or similar tax on inheritance or gifts.

Transfer taxes etc.; VAT No transfer taxes, stamp duty or similar taxes are currently imposed in Norway on purchase, disposal or redemption of securities such as the Notes. Furthermore, there will be no VAT payable in Norway on the transfer of the Notes.

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Proposed Financial Transactions Tax

On 14 February 2013, the European Commission published a proposal for a Directive for a common financial transactions tax (“FTT”) in Belgium, Germany, Estonia, Greece, Spain, France, Italy, Austria, Portugal, Slovenia and Slovakia (the “Participating Member States”). However, Estonia has since stated that it will not participate.

The proposed FTT has very broad scope and could, if introduced in its current form, apply to certain dealings in the Notes (including secondary market transactions) in certain circumstances. Primary market transactions referred to in Article 5(c) of Regulation (EC) No 1287/2006 are expected to be exempt.

Under current proposals the FTT could apply in certain circumstances to persons both within and outside of the Participating Member States. Generally, it would apply to certain dealings in the Notes where at least one party is a financial institution, and at least one party is established in a Participating Member State. A financial institution may be, or be deemed to be, “established” in a Participating Member State in a broad range of circumstances, including (a) by transacting with a person established in a Participating Member State or (b) where the financial instrument which is subject to the dealings is issued in a Participating Member State.

However, the FTT proposal remains subject to negotiation between Participating Member States and the scope of any such tax is uncertain. It may therefore be altered prior to any implementation, the timing of which remains unclear. Additional EU Member States may decide to participate.

Prospective holders of the Notes are advised to seek their own professional advice in relation to the FTT.

FATCA Withholding

Pursuant to certain provisions of the U.S. Internal Revenue Code of 1986, as amended, commonly known as FATCA, a “foreign financial institution” may be required to withhold on certain payments it makes (“foreign passthru payments”) to persons that fail to meet certain certification, reporting, or related requirements. The Issuer is a foreign financial institution for these purposes. A number of jurisdictions (including Norway) have entered into, or have agreed in substance to, intergovernmental agreements with the United States to implement FATCA (“IGAs”), which modify the way in which FATCA applies in their jurisdictions. Under the provisions of IGAs as currently in effect, a foreign financial institution in an IGA jurisdiction would generally not be required to withhold under FATCA or an IGA from payments that it makes. Certain aspects of the application of FATCA and IGAs to instruments such as the Notes, including whether withholding would ever be required pursuant to FATCA or an IGA with respect to payments on instruments such as the Notes, are uncertain and may be subject to change. Even if withholding would be required pursuant to FATCA or an IGA with respect to payments on instruments such as the Notes, such withholding would not apply prior to 1 January 2019 and Notes that have a fixed term and are not treated as equity for U.S. federal income tax purposes issued on or prior to the date that is six months after the date on which final regulations defining “foreign passthru payments” are filed with the U.S. Federal Register generally would be “grandfathered” for purposes of FATCA withholding unless materially modified after such date. However, if additional notes (as described under “Terms and Conditions of the Ordinary Notes—Further Issues” and “Terms and Conditions of the VPS Notes—Further Issues”)) that are not distinguishable from previously issued Notes are issued after the expiration of the grandfathering period and are subject to withholding under FATCA, then withholding agents may treat all such Notes that are not distinguishable, including the Notes offered prior to the expiration of the grandfathering period, as subject to withholding under FATCA. Holders should consult their own tax advisers regarding how these rules may apply to their investment in the Notes. In the event any withholding would be required pursuant to FATCA or an IGA with respect to payments on the Notes, no person will be required to pay additional amounts as a result of the withholding.

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SUBSCRIPTION AND SALE AND TRANSFER AND SELLING RESTRICTIONS

The Dealers have, in a programme agreement (such agreement, as amended and/or supplemented and/or restated from time to time, the “Programme Agreement”) dated 7 July 2017 agreed with the Issuer a basis upon which they or any of them may from time to time agree to purchase the Ordinary Notes only. Any such agreement will extend to those matters stated under “Form of the Notes” (only in relation to the Ordinary Notes) and “Terms and Conditions of the Ordinary Notes”. The Ordinary Note Arranger and the Dealers have not been involved in the structuring of the VPS Notes, will not participate in any issuances of the VPS Notes and therefore accept no responsibility or liability in connection with the VPS Notes (in particular, for any subscriptions to the VPS Notes under the Programme and/or any issuance or underwriting thereof). In the Programme Agreement, the Issuer has agreed to reimburse the Dealers for certain of their expenses in connection with the establishment of the Programme and the issue of Notes under the Programme and to indemnify the Dealers against certain liabilities incurred by them in connection therewith.

Transfer and Selling Restrictions

United States The Notes have not been and will not be registered under the Securities Act and may the Notes may include Bearer Notes that are subject to U.S. tax law requirements. Subject to certain exceptions, the Notes may not be offered, sold or, in the case of Bearer Notes, delivered within the United States or to, or for the account or benefit of, U.S. persons. Terms used in this paragraph have the meanings given to them by Regulation S.

The Bearer Notes are subject to U.S. tax law requirements and may not be offered, sold or delivered within the United States or its possessions or to a United States person, except in certain transactions permitted by U.S. tax regulations. Terms used in this paragraph have the meanings given to them by the Code and U.S. Treasury regulations thereunder. The applicable Final Terms (or Pricing Supplement, in the case of Exempt Notes) will identify whether TEFRA C rules or TEFRA D rules apply or whether TEFRA is not applicable.

Each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that it will not offer, sell or, in the case of Bearer Notes, deliver Notes (a) as part of their distribution at any time or (b) otherwise until 40 days after the completion of the distribution, as determined and certified by the relevant Dealer or, in the case of an issue of Notes on a syndicated basis, the relevant lead manager, of all Notes of the Tranche of which such Notes are a part, within the United States or to, or for the account or benefit of, U.S. persons. Each Dealer has further agreed, and each further Dealer appointed under the Programme will be required to agree, that it will send to each Dealer to which it sells any Notes during the distribution compliance period a confirmation or other notice setting forth the restrictions on offers and sales of the Notes within the United States or to, or for the account or benefit of, U.S. persons. Terms used in this paragraph have the meanings given to them by Regulation S.

Until 40 days after the commencement of the offering of any Series of Notes, an offer or sale of such Notes within the United States by any dealer (whether or not participating in the offering) may violate the registration requirements of the Securities Act if such offer or sale is made otherwise than in accordance with an available exemption from registration under the Securities Act.

Each issuance of Exempt Notes which are also Index Linked Notes or Dual Currency Notes shall be subject to such additional U.S. selling restrictions as the Issuer and the relevant Dealer may agree as a term of the issuance and purchase of such Notes, which additional selling restriction shall be set out in the applicable Pricing Supplement.

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Public Offer Selling Restriction under the Prospectus Directive Prior to 1 January 2018, in relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), each Dealer represents and agrees, and each further Dealer appointed under the Programme will be required to represent and agree, that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the “Relevant Implementation Date”) it has not made and will not make an offer of Notes which are the subject of the offering contemplated by this Base Prospectus as completed by the final terms in relation thereto to the public in that Relevant Member State, except that it may, with effect from and including the Relevant Implementation Date, make an offer of Notes to the public in that Relevant Member State:

(i) if the final terms in relation to the Notes specify that an offer of those Notes may be made other than pursuant to Article 3(2) of the Prospectus Directive in that Relevant Member State (a “Non-exempt Offer”), following the date of publication of a prospectus in relation to such Notes which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, provided that any such prospectus has subsequently been completed by the final terms contemplating such Non-exempt Offer, in accordance with the Prospectus Directive, in the period beginning and ending on the dates specified in such prospectus or final terms, as applicable and the Issuer has consented in writing to its use for the purpose of that Non-exempt Offer;

(ii) at any time to any legal entity which is a qualified investor as defined in the Prospectus Directive;

(iii) at any time to fewer than 150 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) subject to obtaining the prior consent of the relevant Dealer or Dealers nominated by the Issuer for any such offer; or

(iv) at any time in any other circumstances falling within Article 3(2) of the Prospectus Directive,

provided that no such offer of Notes referred to in (ii) to (iv) above shall require the Issuer or any Dealer to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive.

For the purposes of this provision, the term “Notes” means all Notes and the expression “an offer of Notes to the public” in relation to any Notes in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Notes to be offered so as to enable an investor to decide to purchase or subscribe the Notes, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State and the expression Prospectus Directive means Directive 2003/71/EC (and amendments thereto, including Directive 2010/73/EU), and includes any relevant implementing measure in the Relevant Member State.

Prohibition of Sales to EEA Retail Investors From 1 January 2018, each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that it has not offered, sold or otherwise made available and will not offer, sell or otherwise make available any Notes which are the subject of the offering contemplated by this Base Prospectus as completed by the Final Terms (or the Pricing Supplement, as the case may be) in relation thereto to any retail investor in the European Economic Area. For the purposes of this provision:

(a) the expression "retail investor" means a person who is one (or more) of the following:

(i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, "MiFID II"); or

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(ii) a customer within the meaning of Directive 2002/92/EC (as amended, the "Insurance Mediation Directive"), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or

(iii) not a qualified investor as defined in Directive 2003/71/EC (as amended, the “Prospectus Directive”); and

(b) the expression “offer" includes the communication in any form and by any means of sufficient information on the terms of the offer and the Notes to be offered so as to enable an investor to decide to purchase or subscribe the Notes.

United Kingdom Each Dealer represents and agrees:

(i) in relation to any Notes having a maturity of less than one year, (i) it is a person whose ordinary activities involve it in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of its business and (ii) it has not offered or sold and will not offer or sell any Notes other than to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or as agent) for the purposes of their businesses or who it is reasonable to expect will acquire, hold, manage or dispose of investments (as principal or agent) for the purposes of their businesses where the issue of the Notes would otherwise constitute a contravention of Section 19 of the FSMA by the Issuer;

(ii) it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) received by it in connection with the issue or sale of any Notes in circumstances in which Section 21(1) of the FSMA does not apply to the Issuer; and

(iii) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to any Notes in, from or otherwise involving the United Kingdom.

Japan The Notes have not been and will not be registered under the Financial Instruments and Exchange Act of Japan (Law No. 25 of 1948, as amended, the “FIEA”) and each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that it has not offered or sold and will not offer or sell any Notes, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organised under the laws of Japan), or to others for re-offering or resale, directly or indirectly, in Japan or to, or for the benefit of, a resident of Japan except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the FIEA and any other applicable laws, regulations and ministerial guidelines of Japan.

Norway Each Dealer represents and agrees, and each further Dealer appointed under the Programme will be required to represent and agree that, unless the Issuer has confirmed in writing to each Dealer that the Base Prospectus have been filed with the FSAN, it has not, directly or indirectly, offered or sold and will not, directly or indirectly, offer or sell any Notes in Norway or to residents of Norway except:

(a) in respect of an offer of Notes addressed to investors subject to a minimum purchase of Notes for a total consideration of not less than €100,000 per investor;

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(b) to “professional investors” as defined in Section 7-1 in the Norwegian Securities Regulation of 29 June 2007 no. 876;

(c) to fewer than 150 natural or legal persons (other than “professional investors” as defined in Section 7-1 in the Norwegian Securities Regulation of 29 June 2007 no. 876), subject to obtaining the prior consent of the relevant Dealer or Dealers for any such offer;

(d) in any other circumstances provided that no such offer of Notes shall result in a requirement for the registration, or the publication by the Issuer or the Dealer or Dealers of a prospectus pursuant to the Norwegian Securities Trading Act of 29 June 2007.

The Notes shall be registered with the Norwegian Central Securities Depository unless (i) the Notes are denominated in NOK and offered or sold outside of Norway to non-Norwegian tax residents only, or (ii) the Notes are denominated in a currency other than NOK and offered or sold outside of Norway.

Republic of Italy The offering of the Notes has not been registered with the Commissione Nazionale per le Società e la Borsa (CONSOB) pursuant to Italian securities legislation and, accordingly, no Notes may be offered, sold or delivered, nor may copies of this Base Prospectus or of any other document relating to any Notes be distributed in Italy, except, in accordance with any Italian securities, tax and other applicable laws and regulations.

Each Dealer has represented and agreed (and each further Dealer appointed under the Programme will be required to represent and agree) that it has not offered, sold or delivered, and will not offer, sell or deliver any Notes or distribute any copy of this Base Prospectus or any other document relating to the Notes in Italy except:

(a) to qualified investors (investitori qualificati), as defined pursuant to Article 100 of Legislative Decree no. 58 of 24 February 1998 (the “Financial Services Act”) and Article 34-ter, paragraph 1, letter (b) of CONSOB regulation No. 11971 of 14 May 1999 (the “Issuers Regulation”), all as amended from time to time; or

(b) in other circumstances which are exempted from the rules on public offerings pursuant to Article 100 of the Financial Services Act and Issuers Regulation.

In any event, any offer, sale or delivery of the Notes or distribution of copies of this Base Prospectus or any other document relating to the Notes in Italy under paragraphs (a) or (b) above must be:

(i) made by an investment firm, bank or financial intermediary permitted to conduct such activities in Italy in accordance with the Financial Services Act, Legislative Decree No. 385 of 1 September 1993 (the “Banking Act”) and CONSOB Regulation No. 16190 of 29 October 2007, all as amended from time to time;

(ii) (if applicable) in compliance with Article 129 of the Banking Act, as amended from time to time, and the implementing guidelines of the Bank of Italy, as amended from time to time; and

(iii) in compliance with any other applicable laws and regulations, including any limitation or requirement which may be imposed from time to time by CONSOB or the Bank of Italy or other competent authority.

General Each Dealer agrees, and each further Dealer appointed under the Programme will be required to agree, that it will (to the best of its knowledge and belief) comply with all applicable securities laws and regulations in

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force in any jurisdiction in which it purchases, offers, sells or delivers Notes or possesses or distributes this Base Prospectus and will obtain any consent, approval or permission required by it for the purchase, offer, sale or delivery by it of Notes under the laws and regulations in force in any jurisdiction to which it is subject or in which it makes such purchases, offers, sales or deliveries and neither the Issuer nor any of the other Dealers shall have any responsibility therefor.

Neither the Issuer nor the Dealers represents that Notes may at any time lawfully be sold in compliance with any applicable registration or other requirements in any jurisdiction, or pursuant to any exemption available thereunder, or assumes any responsibility for facilitating such sale.

With regard to each Tranche, the relevant Dealer will be required to comply with such other restrictions as the Issuer and the relevant Dealer shall agree and as shall be set out in the applicable Final Terms (or the applicable Pricing Supplement, as the case may be).

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BOOK-ENTRY CLEARANCE SYSTEMS

The information set out below is subject to any change in or reinterpretation of the rules, regulations and procedures of the Clearing Systems currently in effect. The information in this section concerning the Clearing Systems has been obtained from sources that the Issuer believes to be reliable, but neither the Issuer nor any Dealer takes any responsibility for the accuracy thereof. Investors wishing to use the facilities of any of the Clearing Systems are advised to confirm the continued applicability of the rules, regulations and procedures of the relevant Clearing System. Neither the Issuer nor any other party to the Agency Agreement will have any responsibility or liability for any aspect of the records relating to, or payments made on account of, beneficial ownership interests in the Notes held through the facilities of any Clearing System or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

VPS Verdipapirsentralen ASA is a Norwegian public limited liability company which is licensed to conduct the business of registering financial instruments in Norway in accordance with the Act of 5 July 2002 no. 64 on the Registration of Financial Instruments (Lov om registrering av finansielle instrumenter) (the “Securities Register Act”). The Securities Register Act requires that, among other things, all notes and bonds issued in Norway shall be registered in the VPS (the “VPS Securities”), except (i) notes and bonds issued by Norwegian issuers outside Norway and denominated in Norwegian kroner with subscription limited to non-Norwegian tax residents only, or in a currency other than Norwegian kroner, and (i) notes and bonds issued by foreign issuers in a currency other than Norwegian kroner.

VPS is a paperless securities registry and registration of ownership, transfer and other rights to financial instruments are evidenced by book entries in the registry. Any issuer of VPS Securities will be required to have an account (issuer’s account) where all the VPS Securities are registered in the name of the holder and each holder is required to have her/his own account (investor’s account) showing such person’s holding of VPS Securities at any time. Both the issuer and the VPS Noteholder will, for the purposes of registration in the VPS, have to appoint an account operator which will normally be a Norwegian bank or Norwegian investment firm.

It is possible to register a holding of VPS Securities through a nominee.

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GENERAL INFORMATION

Authorisation

The establishment of the Programme and the issue of Notes from time to time thereunder have been duly authorised by the Issuer’s CEO pursuant to a liquidity strategy authorised by the Board of Directors of the Issuer on 21 December 2016.

Approval of the Base Prospectus, Admission to Trading and Listing of Notes

Application has been made to the CSSF to approve this document as a base prospectus. Application has also been made to the Luxembourg Stock Exchange for Ordinary Notes issued under the Programme during the period of 12 months from the date of this Base Prospectus to be admitted to trading on the Luxembourg Stock Exchange’s regulated market and to be listed on the Official List of the Luxembourg Stock Exchange. The Luxembourg Stock Exchange’s regulated market is a regulated market for the purposes of the Investment Services Directive.

It is expected that each Tranche of Notes which is to be listed on the Luxembourg Stock Exchange will be admitted separately as and when issued, subject only to the issue of a Temporary Global Note or a Permanent Global Note initially representing the Notes of such Tranche.

In addition, Notes may be listed on one of the Oslo Stock Exchange’s regulated markets, as more particularly described on the cover page of this Base Prospectus.

Documents Available

So long as Notes are capable of being issued under the Programme or any Notes otherwise remaining outstanding under the Programme, copies of the following documents will, when published, be available from the registered office of the Issuer and from the specified offices of the Paying Agents for the time being in London and in Luxembourg:

(i) the constitutional documents (with an English translation thereof) of the Issuer;

(ii) the Agency Agreement, the Deed of Covenant, the forms of the Global Notes, the Definitive Notes and the Coupons and the Talons, and the VPS Trustee Agreement;

(iii) a copy of this Base Prospectus;

(iv) any future prospectuses, information memoranda and supplements including Final Terms and Pricing Supplements (in the case of Exempt Notes) (save that Final Terms relating to a Note which is neither admitted to trading on a regulated market in the European Economic Area nor offered in the European Economic Area in circumstances where a prospectus is required to be published under the Prospectus Directive will only be available for inspection by a holder of such Note and such holder must produce evidence satisfactory to the Issuer and the Paying Agent as to its holding of Notes and identity) to this Base Prospectus and any other documents incorporated therein by reference;

(v) the audited consolidated financial statements of the Issuer as of and for the financial year ended 31 December 2015, together with the audit report prepared in connection therewith;

(vi) the audited consolidated financial statements of the Issuer as of and for the financial year ended 31 December 2016, together with the audit report prepared in connection therewith;

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(vii) the unaudited interim consolidated financial statements of the Issuer as of and for the three month period ended 31 March 2017; and

(viii) the most recently published audited annual consolidated financial statements of the Issuer and the most recently published unaudited interim consolidated financial statements (if any) of the Issuer, in each case with any audit or review reports prepared in connection therewith.

In addition, copies of this Base Prospectus and each Final Terms relating to Notes (other than VPS Notes) which are admitted to trading on the Luxembourg Stock Exchange’s regulated market are available on the Luxembourg Stock Exchange’s website (www.bourse.lu).

Clearing Systems

The Bearer Notes have been accepted for clearance through Euroclear and Clearstream, Luxembourg. The appropriate Common Code and ISIN for each Tranche of Bearer Notes allocated by Euroclear and Clearstream, Luxembourg will be specified in the applicable Final Terms. If the Notes are to clear through an additional or alternative clearing system (including the VPS) the appropriate information will be specified in the applicable Final Terms. Euroclear; Clearstream, Luxembourg; and the VPS are the entities in charge of keeping the records.

The address of Euroclear is Euroclear Bank SA/NV, 1 Boulevard du Roi Albert II, B-1210 Brussels and the address of Clearstream, Luxembourg is Clearstream Banking, société anonyme, 42 Avenue JF Kennedy, L-1855 Luxembourg and the address of the VPS is Fred. Olsens Gate 1, P.O.Box 1174 Sentrum, 0107 Oslo, Norway.

Conditions for Determining Price

The price and amount of Notes to be issued under the Programme will be determined by the Issuer and the relevant Dealer at the time of issue in accordance with prevailing market conditions.

Yield

In relation to any Tranche of Fixed Rate Notes or Reset Notes (other than Fixed Rate Notes or Reset Notes which are Exempt Notes), an indication of the yield in respect of such Notes will be specified in the applicable Final Terms. The yield is calculated at the Issue Date of the Notes on the basis of the relevant Issue Price and (in the case of Reset Notes) on the basis of the rate of interest as at the Issue Date of the Notes. The yield indicated will be calculated as the yield to maturity as at the Issue Date of the Notes and will not be an indication of future yield.

Significant or Material Change

There has been no material adverse change in the prospects of the Issuer or of the SR-Bank Group since 31 December 2016, and there has been no significant change in the financial or trading position of the Issuer or of the SR-Bank Group since 31 March 2017.

Litigation

Neither the Issuer nor any member of the SR-Bank Group has been involved in any governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the Issuer is aware) in the 12 months preceding the date of this document which may have or have in such period had a significant effect on the financial position or profitability of the Issuer or of the Group.

http://www.bourse.lu/

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Dealers Transacting with the Issuer

Certain of the Dealers and their affiliates have engaged, and may in the future engage, in investment banking and/or commercial banking transactions with, and may perform services to the Issuer and its affiliates in the ordinary course of business. In addition, in the ordinary course of their business activities, the Dealers and their affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers. Such investments and securities activities may involve securities and/or instruments of the Issuer or the Issuer’s affiliates. Certain of the Dealers or their affiliates that have a lending relationship with the Issuer routinely hedge their credit exposure to the Issuer consistent with their customary risk management policies. Typically, such Dealers and their affiliates would hedge such exposure by entering into transactions which consist of either the purchase of credit default swaps or the creation of short positions in securities, including potentially the Notes issued under the Programme. Any such short positions could adversely affect future trading prices of Notes issued under the Programme. The Dealers and their affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.

Auditors

The independent auditors of the Issuer are PriceWaterhouseCoopers AS (the “Auditors”), a member of the Norwegian Institute of Public Accountants (Den norske Revisorforening).

The Auditors have audited the consolidated financial statements of the Issuer as of and for the years ended 31 December 2015 and 31 December 2016, as incorporated in this Base Prospectus by reference.

146

THE ISSUER

SpareBank 1 SR-Bank ASA Bjergsted Terrasse 1, PO Box 250

4066 Stavanger, Norway

PRINCIPAL PAYING AGENT AND TRANSFER AGENT REGISTRAR

Citibank, N.A., London Branch Citigroup Centre, Canada Square,

London E14 5LB, United Kingdom

Citigroup Global Markets Deutschland AG Germany Agency and Trust Department

Reuterweg 18, 60323 Frankfurt, Germany

VPS AGENT VPS TRUSTEE

SpareBank 1 SR-Bank ASA Bjergsted Terrasse 1, P.O. Box 250


Nordic Trustee ASA Haakon VII Gate 1M, P.O. Box 1470 Vika

0116 Oslo, Norway

ORDINARY NOTE ARRANGER VPS NOTE ARRANGER

J.P. Morgan Securities plc 25 Bank Street, Canary Wharf

London E14 5JP, United Kingdom

SpareBank 1 SR-Bank ASA Bjergsted Terrasse 1, P.O. Box 250


DEALERS (ORDINARY NOTES ONLY)

Citigroup Global Markets Limited Canada Square Canary Wharf

London E14 5LB United Kingdom

Commerzbank Aktiengesellschaft Kaiserstraße 16 (Kaiserplatz)

60311 Frankfurt am Main Federal Republic of Germany

Credit Suisse Securities (Europe) Limited

One Cabot Square London E14 4QJ United Kingdom

Goldman Sachs International Peterborough Court

133 Fleet Street London EC4A 2BB

United Kingdom

HSBC Bank plc 8 Canada Square London E14 5HQ United Kingdom

J.P. Morgan Securities plc 25 Bank Street, Canary Wharf

London E14 5JP United Kingdom

Landesbank Baden-Württemberg

Am Hauptbahnhof 2 70173 Stuttgart

Germany

Nomura International plc 1 Angel Lane

London EC4R 3AB United Kingdom

Société Générale 29, boulevard Haussmann

75009 Paris France

Linklaters LLP A34064946

LUXEMBOURG LISTING AGENT AND LUXEMBOURG PAYING AGENT

Banque Internationale à Luxembourg SA 69 route d’Esch

L-2953 Luxembourg

LEGAL ADVISERS

To the Issuer as to Norwegian law To the Dealers as to English law

Advokatfirmaet BA-HR DA Tjuvholmen allé 16

NO-0252 Oslo, Norway

Linklaters LLP One Silk Street

London EC2Y 8HQ United Kingdom

AUDITORS TO THE ISSUER

PricewaterhouseCoopers AS Dromning Eufemias gate 8

NO-0106 Oslo, Norway

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